Orange County

Orange County board could reverse higher fees for new housing

Orange County’s commissioners will consider whether to reverse a fee charged on new home and apartment construction Tuesday, May 16. The change comes as the state Senate weighs two bills that threaten to eliminate impact fees in multiple cities and counties.
Orange County’s commissioners will consider whether to reverse a fee charged on new home and apartment construction Tuesday, May 16. The change comes as the state Senate weighs two bills that threaten to eliminate impact fees in multiple cities and counties. File photo

The Orange County Board of Commissioners could reverse an increase in local impact fees on new home construction Tuesday in response to recently approved state House bills.

Both bills still need Senate approval and the governor’s signature.

Meanwhile, the commissioners will discuss the change Tuesday at the Southern Human Services Center in Chapel Hill. The meeting begins at 7 p.m.

If approved, it would reinstate last year’s impact fee, which helps pay for school construction, but leave in place lower fees for senior adult housing and small single-family homes. It also would imposed a one-year moratorium on impact fee increases.

Developers would be reimbursed for any overpayment since Jan. 1.

County staff estimated the change could cost roughly $300,000 a year but give them time to consider issues raised in the legislature and decide how best to comply with two related state bills.

Orange County has charged the fee with state approval since 1987, generating over $2 million last year. The commissioners voted in November to raise the fee and link it to the type and size of home, the number of bedrooms, and whether the housing was built for senior adults.

Some developers complained, and those with zoning or building permits were “grandfathered” in under the old fee. But a Chapel Hill development that missed the “grandfather” deadline prompted a Surry County lawmaker to introduce two bills in March – HB 406 and HB436 – targeting impact fees statewide.

The Chapel Hill developer complained the fee increase would raise the bill for redeveloping the Town House Apartments from $300,000 to over $1 million. The county extended the deadline in response to the developer’s petition in April.

The House voted soon after to approve HB406, stripping Orange County’s fee authority. Lawmakers then approved a modified version of HB 436, which would strip the ability of multiple governments to levy impact fees for development-related infrastructure.

The amended bill would stop local governments, including Carrboro, Chapel Hill, Pittsboro, and Orange and Chatham counties, from raising or enacting new impact fees. It also would launch a statewide impact fee study.

Tammy Grubb: 919-829-8926, @TammyGrubb

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