City Council Adopts Impact Fees

An ordinance adopted by the City Council will lead to a more equitable means of funding the expansion of water and wastewater facilities. The City of El Paso Impact Fee Ordinance requires developers to pay a share of El Paso Water Utilities’ growth-related capital costs.

Over the next 10 years, EPWU will pay more than $225 million to build the facilities needed to provide water and wastewater service to new development. Although developers pay for small pipelines and other onsite facilities, EPWU pays for backbone facilities. This includes water and wastewater treatment facilities, wells, reservoirs, large pipelines and other offsite facilities related to the expansion of the pumping and distribution systems.

Until now, all customers have subsidized growth and new development costs. With 20 percent of the current bill going toward new development costs, the average residential customer will pay more than $1,000 toward new development costs over the next 10 years.

Recovering Costs
Impact fees are a way to charge the cost of new developments to new developments. These one-time fees are paid at the time a building permit is issued to recover a portion of the cost of building infrastructure to serve new development.

State law specifies specific steps that must be followed before the fees are adopted. After completing the process, which included two public hearings, the City Council adopted impact fees ranging from $1469 to $1617 for new single-family homes in the northeast, west and east El Paso service areas.

Affordability
During public hearings, constituents cited statistics on housing markets in the southern half of the nation for cities with populations of 500,000 or more. El Paso’s housing market was said to rank near the bottom on a list compiled by the U.S. Census Bureau, and speakers speculated that imposing impact fees would move the cost of a new home beyond the reach of many El Pasoans.

The City Council subsequently approved the creation of a program that provides incentives for using smart growth principles to develop more sustainable communities. The incentives can offset or subsidize housing costs, which would make new homes more affordable for lower-income families.

Incorporating features such as access to transit corridors, density, walkability and energy efficiency would make communities more attractive to potential buyers while increasing the supply of affordable housing units. Similar programs have been successful in San Antonio and Austin.