by Phil Kent, SLF President
As appeared in Atlanta Business Chronicle, July 19, 2002
For many years, the success story of the metro Atlanta area has been its booming growth and development. The new additions to the skyline, the employment opportunities and the prestige that robust growth brings to our state are as important as the revenue it produces.
At the same time, we hate the products of exploding, unmitigated growth, such as gridlocked traffic, pollution, diminishing green space and stressed-out public services. It's time to be clear about who is obligated to pay what for community improvements and government services in Georgia.
Local and county governments are authorized to use taxes imposed on land, businesses and individuals, as well as income from bonds approved by voters, to fund improvements to infrastructure to serve the public. These general revenues can be used at the discretion of the government for public purposes.
However, state law is very specific about how impact fees can be collected and spent. These fees must be collected evenly, according to a formula established by the state to ensure that the fees do not exceed the developers' fair share of new roads and infrastructure additions that will offset the effect of that project's impact. In the case of Atlanta, the city collects fees to underwrite transportation/roads, parks, and emergency/police stations. Those earmarked fees cannot be used for any other purpose, a question raised in the Southeastern Legal Foundation's current federal court litigation against the city. In short, if you pay a fee, by law, you deserve a service.
The Greater Atlanta Home Builders Association has taken Cherokee County to court over the design of its impact fee ordinance and is also participating as a plaintiff in the constitutional challenge to the way the city of Atlanta is spending its impact fee funds. An appeal to the Georgia Supreme Court in the coming days will help answer some questions about Cherokee's plan - including whether the county will experience a serious shortfall in revenues for roads and other facilities because of the faulty design of its ordinance.
In addition, the federal court case will provide broader answers about the expenditures of more than $20 million made under Atlanta's fee program. Developers are not "greedy," as a shrill Atlanta Journal-Constitution editorial recently claimed, when they demand that fees be spent according to law.
Impact fees collected ostensibly to offset the cost to the county or city for the impact of the new building actually discourage new home building. Consider that impact fees alone in certain jurisdictions - including those being proposed in some metro Atlanta counties - can or will add as much as $3,500 to the cost of a new home. As a result, affordable housing is less available. Further, some studies show that excessive fees can lead to more sprawl, as builders seek land and friendlier government climates in which to meet expanding housing demands.
That's not to say that impact fees are a bad idea; in fact, the cities of Alpharetta and Canton have enacted, or are preparing to enact, impact fees that truly help to offset the direct impact of new development, designed with the input of builders. Under Georgia law, communities must bear the costs for maintaining public services as a whole, which is best accomplished through long-term regional planning and bonds. Impact fees are more exclusive than that, and should be designed to help join new buyers into the community on a cost-sharing basis.
For now, the courts will decide whether specific versions of impact fees meet with state and federal law mandates. However, it will fall to local governments across Georgia to better prepare for growth through concerted regional planning and, where appropriate, the use of legal, specific impact fees.
Kent is president of the Southeastern Legal Foundation, a constitutional public interest law firm representing the Greater Atlanta Home Builders and National Association of Industrial and Office Properties in a federal court challenge to Atlanta's impact fee program.
