Alternative to impact fee considered

Frederick News-Post:
Sunday, November 11, 2005

Thursday’s snowy morning may end up a boon to affordable housing throughout the state and end a conflict over how to help low-income workers afford to live in Frederick County.

If 5 or 6 inches of snow hadn’t hit the region, local Realtor Billy Shreve might not have sat down and drafted his alternative to Commissioner Jan Gardner’s proposal to change the county’s impact fee to an impact tax, he said Saturday.

Ms. Gardner’s proposal would allow the county to create waivers for cheaper housing and a sliding scale in which larger homes would be charged a greater tax than smaller homes, based on a square-foot assessment.

Mr. Shreve’s proposal would allow Maryland’s 23 counties to draft ordinances that would allow waivers for impact fees on a case-by-case basis. Affordable-housing advocates would go before county-appointed boards to seek a special waiver for their projects, Mr. Shreve said.

“I have a solution to your problem, and hopefully it is quite simple,” said Mr. Shreve, who is a past president of Habitat for Humanity, a member of the Frederick County Builders Association and supporter of the Interfaith Housing Alliance. “By changing the current impact fee, affordable housing all across Maryland can be helped.”

Affordable-housing advocates argued passionately in favor of Ms. Gardner’s impact tax at Saturday’s hearing before Frederick’s eight-man delegation of state lawmakers, saying it would ease the impact fee’s financial pressure on building new homes.

After the hearing, some members of the delegation said Ms. Gardner’s proposal would be killed when it comes to a delegation vote. Even before Mr. Shreve presented his alternative, delegates challenged Ms. Gardner to defend her legislation.

“I do think there may be a way to modify the existing law to address the needs that you are putting forth here, because I do believe they are legitimate needs,” Delegate Galen Clagett said.

Ms. Gardner suggested changing the impact fee to an impact tax because state law allows no exceptions within the impact fee for affordable housing projects. Sliding scales are forbidden under Maryland’s impact fee laws.

Delegates argued with Ms. Gardner over whether her proposal constituted a new tax.

“You keep saying it’s not a new tax, but it seems to me reading this language that it is a new tax,” Delegate Patrick N. Hogan.. “ … Some people, their taxes are going to go way up, and some people will go way down.”

Ms. Gardner said her proposal was not a new tax; the revenue from the tax would be the same as collected from the fee, and it was a question of fairness.

Opponents said Ms. Gardner’s proposal could give the county a blank check to charge new development.

A month away from an election year, Frederick’s state lawmakers are uneasy about imposing a greater burden on builders of large homes and delegates and senators jumped on Mr. Shreve’s alternative.

Delegate Rick Weldon, a southern Frederick County Republican, said he would deliver Mr. Shreve’s proposal Monday to Annapolis bill drafters and attorneys, and introduce the legislation in the House of Delegates.

Motivation is high on all sides to find a solution to a real estate market that is pricing people out of Frederick county.

Mr. Shreve’s plan received an immediate endorsement by Interfaith President James Upchurch. A Department of Housing and Urban Development report ranked Maryland the worst in the nation for the rigidity of its impact fee laws, he said.

A HUD statement said the report found that “outdated, exclusionary and unnecessary regulations continue to block the construction or rehabilitation of affordable housing in some parts of America.”

Mr. Upchurch asked the delegation to stick together to change impact fee laws.

“But if you feel you are not willing to make that political commitment — it’s going to be tough and might take you a few years to do it — then I would ask you to approve Commissioner Gardner’s effort today, because we need help now,” Mr. Upchurch said.

Sen. David Brinkley called Mr. Shreve’s proposal “intriguing.”

“This could be a pretty good idea to bring the different sides together,” Mr. Hogan said.

But Mr. Clagett had reservations. He would have preferred if the suggestion had been vetted by the county commissioners.

“I’m not on fire, but I think it’s a good proposal,” he said.

Because it is a bill with statewide effect, it does not require the delegation’s support. But it would also not be granted local courtesy — unanimous passage by out-of-county lawmakers with the trust that local lawmakers know what legislation is most needed in their communities.