Orange County

Orange County board reverses change in home fees under state threats

Orange County’s commissioners reversed a November decision to increase some impact fees charged on new home and apartment construction Tuesday, May 16.
Orange County’s commissioners reversed a November decision to increase some impact fees charged on new home and apartment construction Tuesday, May 16. File photo

The Orange County commissioners, with little discussion, have rolled back this year’s change in impact fees on new homes and adjusted the county’s policy to match one of two state bills that put the fees at risk.

The county has levied the impact fee on single- and multifamily homes since the General Assembly authorized the county to do so in 1987. The money helps pay for school construction and could provide roughly $3 million this year, County Manager Bonnie Hammersley said.

Tuesday night’s 6-1 vote reset the fees to last year’s levels but left in place reduced fees for senior adult housing and single-family homes up to 800 square feet.

The change also sets a one-year moratorium on any new fee increases and reimburses developers for any overpayment since Jan. 1. County staff members expect the change to cost roughly $300,000 a year but give them time to consider issues raised in the legislature.

Commissioners Chairman Mark Dorosin characterized the move as “a crass political calculation.”

“We find ourselves in an unfortunate situation,” Dorosin said. “We’ve talked a lot about the legislature and the difficulties it has imposed on local governments generally, and on education in particular.”

“I just hope that folks who are listening understand that these decisions are being made under the long shadow of the threat to pull this funding completely,” he said.

Commissioner Penny Rich cast the lone vote against rolling back the fees.

“I think Orange County did its due diligence, and I think we had a lot of discussion about this and we came up with a good conclusion,” she said. “I don’t think what we’re doing is right, and I’ve got to vote with my conscience.”

Orange County has charged the fee with state approval since 1987, basing it until this year on the type of home and whether it was located in the Chapel Hill-Carrboro City Schools or Orange County Schools district. The commissioners voted in November to change the fees and link them to the number of bedrooms.

Some developers complained, and those with zoning or building permits were “grandfathered” in under the old fee. But a Chapel Hill developer who didn’t make the “grandfather” deadline and faced triple the fee costs prompted a Surry County lawmaker to introduce two bills in March targeting impact fees statewide.

The developer also asked the county for an extension, and the board granted more time in April. The state House voted soon after to approve HB406, which strips only Orange County’s fee authority.

Lawmakers also approved a modified version of HB436, which would bar multiple governments, including Carrboro, Chapel Hill, Pittsboro, and Orange and Chatham counties, from raising or enacting new impact fees. The bill also launches a statewide impact fee study.

Both bills are now in a Senate committee. County Attorney John Roberts said he expects them to move forward now that the General Assembly has finished its budget negotiations.

Tammy Grubb: 919-829-8926, @TammyGrubb