By Dan McKay And Sean Olson
Journal Staff Writer
Mayor Martin Chávez will propose today that the city reduce impact fees charged to new development to encourage construction activity.
The goal, he said, is to stimulate the economy, boost jobs and increase city revenue.
Most projects would see fees cut in half. Environmentally friendly projects would qualify for a complete waiver.
The proposal would cover a one-year period, starting July 1.
"The stark reality is that impact-fee revenue to the city is tanking, and we want to do what we can to stimulate some of that (business) activity," Chávez said Tuesday in an interview.
County Commissioner Art De La Cruz asked the county on Tuesday to consider something similar. He wants to suspend impact fees completely for a short period of time to gauge the success of such an initiative.
"I want to create jobs," De La Cruz said.
His measure would apply in unincorporated parts of Bernalillo County. Chávez's proposal would apply to projects within the city limits.
City Council President Isaac Benton said he doesn't support reducing fees "across the board."
"It ought to be targeted," he said. "It ought to be surgical."
Chávez said the city has little to lose because construction activity is already dwindling. Where once the city handled 300 to 400 residential-building permits a month, it now sees only two dozen or so, the mayor said.
Forgoing impact fees, which are used to help build parks, streets and similar amenities, could cost the city about $1.5 million over the year, Chávez said. But it should be offset by the tax revenue generated by construction and the economic impact of workers having jobs and spending money, he said.
Katherine Martinez, Home Builders Association of Central New Mexico government affairs director, said reduced impact fees could provide a big boost for local builders.
She said the fee savings for green projects, along with tax credits offered by the state for green buildings, could reduce the cost of building — and buying — a home by up to nearly $20,000. She said that sort of savings could mean the difference between builders starting projects in the city or continuing to wait out the recession.
"I think it provides a pretty big boost to a downturned economy," Martinez said.
