Proposed impact fee discussed at public hearing
DENTON — A public hearing on a proposed change to the way Caroline County recoups the cost to build infrastructure to support new residential development garnered a small but strong response.
The two proposed bills, both introduced at the Caroline County commissioners’ Tuesday, Aug. 28, would repeal the current excise tax on new residential development, and replace it with an impact fee, specifically to fund new school school construction.
Currently, the county only collects a $5,000 excise tax when a lot is created, not when a structure is built.
The impact fee proposed to replace that tax would also be $5,000, but would allow the county to bill all new residential construction, including multi-unit buildings, in both incorporated and unincorporated areas, more uniformly and fairly, county staff said.
At the public hearing, held during the commissioners’ meeting Tuesday, Sept. 11, Bob Chapel, of Ridgely, said he supported repealing the excise tax, but he did not support enacting the impact fee.
Chapel said he once served as a councilman for a city in Washington when it was being pressured by the local school district to enact an impact fee on new homes.
“The fees never add up to the cost of a new school, but it has a real impact on the guy paying those fees,” Chapel said.
Chapel said, after looking over records of recent construction in Caroline County, the biggest year was 2015, when the county collected $179,000 in excise taxes.
“It’s not a significant puddle of money that would accumulate,” Chapel said. “You would have to set the fee at $50,000 to make a difference.”
What it will do, Chapel said, is hurt affordable housing availability, both apartments and single-family homes.
Owners of rental properties will fold the impact fee into the rents they charge, Chapel said. Home buyers could add the fee to their mortgage, but that could make it more difficult to get a mortgage, especially for firsttime buyers.
“Impact fees encourage distortion in the market and make it impossible to afford a new house,” Chapel said.
The only other public comment came from Sue Simmons, director of the Caroline County Department of Recreation and Parks, who suggested looking into a formula like Queen Anne’s County uses, that takes into account square footage, as opposed to the proposed flat fee, so someone building a mansion pays more than someone building a small rancher.
“That could address the affordable housing question,” Simmons said.
The commissioners were scheduled to discuss possible amendments to the impact fee bill at a work session Tuesday, Sept. 18, before bringing the bills back for a third reading and potential amendment and adoption at a future regular meeting.