Salt Lake City will not collect impact fees from new developers for the next year. The city council voted Tuesday night to suspend the fees until they can come up with a system that’s better for businesses and taxpayers.
Local governments charge developers one-time impact fees to pay for new roads, parks and public safety infrastructure made necessary by the influx of new people. The city is required to spend the money in six years or give it back.
Jill Remington Love is director of Community and Economic Development. She says impact fees can be a useful tool.
“We know we need to collect them, but we think we could use them more effectively to get the type of development that we want,” Love says. “So that might mean sometimes there is a reduced impact fee to get sustainable development or for affordable housing or in a particular geographic area of the city that we’re trying to redevelop.”
Right now Love says the city has more than enough money in the impact fee account to make up for the 12-month break. And that’s part of the problem. By law impact fees can only be used to pay for the portion of new projects directly impacted by growth. The city has to pay for the rest. That’s keeping new impact fee-eligible projects from being completed. Over the next year, the council will work with consultants to figure out how to spend the money more efficiently.
Salt Lake City Councilor Kyle LaMalfa wants to take a fresh look at impact fees but he voted against the moratorium, noting Salt Lake City is in the middle of a major development boom.
“By failing to collect impact fees, we are setting ourselves up so that the people of Salt Lake City will have to maintain that level of service, rather than the new entrants to our city,” LaMalfa says.
The moratorium passed 4-2 with LaMalfa and Councilor Erin Mendenhall being the two no-votes. Councilor Luke Garrott was not present. The moratorium goes into effect November 2nd.
