Developers rule Columbus, resist needed impact fees
You don’t have to live in the Columbus area long to realize the tremendous power that developers wield.
There are lots of one-off cases: The way in which the Arena District became a ward of the county despite the rejection of public financing by the voters; the money Columbus spent on providing the freeway interchange that allowed Polaris to come into being; how the Easton developers got the state to build hugely expensive roadworks so they could have their own dedicated freeway ramps.
The list goes on and on.
Recently there has been interesting news from Licking County, where the western part around Pataskala is one of the new development frontiers.
According to a July 26 article in The Newark Advocate, the residents are resisting.
The agenda includes impact fees: fees on new development that would go towards the cost of the necessary highway construction.
The fees proposed by the City of Pataskala, though, are derisory: $1,140 per dwelling unit; for very large distribution centers, some measuring in excess of a million square feet, the fee would be $0.064, which amounts to a mere $64,000 for a million square foot development.
Why derisory?
First, because where impact fees are taken seriously, they are much higher: in Orange County, California, according to the county website, they are a whopping $24,000 per single family dwelling unit.
One reason that they are higher is because public works are very expensive. This became clear in another recent bit of news from Granville, where the city is planning to buy land so as to preclude its development.
But here is the thing: according to an Aug. 6 article in The Newark Advocate, the public costs of the development would far exceed that price. A single roundabout, for example, costs $850,000.
Meanwhile, back in Columbus, developers have always resisted impact fees.
As I discuss in my recent book Boomtown Columbus (OSU Press, 2021), the topic has surfaced numerous times since the 1980s, only to be shot down.
Regarding housing, this is on the spurious grounds that the fee will be added to the price of the house: spurious, because historically – not necessarily currently – the Columbus area has enjoyed a surplus of housing.
If, as in Southern California, the market could bear an addition to the selling price, developers would utter nary a squeak. But in Columbus, the competition for buyers has historically been too intense, and so developers resist by shedding crocodile tears for the consumer.
This then means that the newer developments can compete more effectively and drive older vintages out of business: think Fashion Place (Polaris) and the cratering of Northland. It shows up in housing, too.
If the price of housing on the city’s edge reflected the real costs of development – new highways, new schools, new parks – then housing closer in would get more attention from buyers. Sure there are the German Villages and Bexleys of the world, but what I show in my book is that between 2011 and 2016, average home values declined in 23 of the city’s 40 ZIP code areas. Totally remarkable.
No wonder, as a recent Dispatch article pointed out, housing in poorer parts of the city is paying property taxes reflecting values higher than they should be; the assessors can’t keep up with the decline.
No need to explain why my book has a subtitle ‘and How Developers Got Their Way.’ The sad story of impact fees points the way.
Kevin Cox is an emeritus distinguished professor at Ohio State University. He has lived in Columbus for more than 55 years.