Letter_Yuen_Hoffmann_Sept_08 - Laserfiche WebLink

Home

Honorable Pete Hoffmann Chair and Presiding Officer and Members of the County Council COUNTY COUNCIL Page 6 September 9, 2005 the owner of the raw land, who sells it to 2 the developer, who builds the homes, and sells therm to 3 the home purchaser, the impact fee can conceivably be absorbed by any of these three, or by a combination of all three. This issue has been studied extensively on the Mainland, without a firm conclusion, and perhaps the fairest thing that can be said is that it may depend upon market conditions. Given the affordable housing problem on the island,, we do not want to push the cost of housing higher, and given the scarcity of developers doing affordable housing, we would also not want to discourage them by decreasing their profit potential. Bill 324 contains a number of provisions designed to lessen the effect ct ors affordable housing, in sec. 36 -10. In summary, the County would pay the impact fee for designated affordable housing or offer loans to cover the impact fee. For legal reasons, the County should not just "waive" the impact fee. The affordable dousing grants and loans will require considerable administration and reordleping. If the impact fee is ultimately passed on to the home buyer-, it then becomes part of the purchase lance and typically is financed within the mortgage. At a 6.25% mortgage, over 30 years, a $6,387 impact fee would cost the buyer about $38/mo. 2. Individual owners of lots would have to pay impact fees. Individuals who currently own lots and want to build hones on therm obviously will bear the impact fee themselves. They cannot pass it on to someone else. This is clearly a large group of local residents, even though an analysis clone with the impact fee study shoves that only about 30% of vacant lots are entirely or partially owned by a Big Island resident. Some lot owners may get relief from the affordable housing provisions of Bill 324, but ma y will not. Again., although the one -time charge is high, if the owner is financing the home, the monthly amount, rolled into a mortgage, is modest. 3. Impact fees may have a bigger negative effect on lower cost lousing than raising similar amount from property taxes. Assuming that impact fees are ultimately carried by the home purchaser (see the discussion above), they have a bigger effect, proportionally, on lower priced housing because they are flat fees. Legally, the impact fee can be varied slightly based on the size