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Rpr 17 O0 05:24p Mark C. Cramer (?04) 940-3172 Cabarrus County Will Become Less Competitivc. Thc higher cost of new and existing housing resulting from impact fees would make our area less attractive for industrial recruilment, became the availability of quality aflbrdable housing is often a very important factor in site selection decisions. In addition, driving purchasers to more-afford_able adjoining counties would reduce opportunities for the area's existing retailers, lenders, and service providers in m~ny business sectors. ..Taxes Grossly Unfair to Currem Residems. Not only are these taxes inequitable to newcomers, they would grossly penalize the many buyers of new or existing homes who ctm~-fly live in Cabarrus County. How do those current residents place any more ora strain on public services than they do already, and should they be penalized for moving to a new neighborhood? Entry...Levcl and all Other Homes Become Less Affordable. Low-to-moderate income and fa'st- time homebuyers who attempt to purchase a home from a builder or 'd-a'ough public low income housing programs or Habitat For Humanity could pay an impact fee greater than their down payment. Many homebuyers could be forced out of the market for new or existing homes by either a significant impact fee or transfer tax. Affordability is already an acute problem in Cabarrus County, and these fees would only make that problem worse. Experience in York County, South Carolina. xhowed a decrease of 50% in affordable manufactured housing starts after they imposed an irnpact fee. Imtmct Fees are Regressive. According to legal case law, the same fee must be charged regardie~ of lot size, price or location because impact fees arc based on thc determined impa~t caused by the development. Since there is no way to know for sure the number of school-age children in each house, ever/house is charged the same race. For example, if an impact fee of $3,000 were applied to all lots regardless of prlce, size or location, the following would result. Using the $3,000 as the impact fee, simple arithmetic tells us this fee is 5% ora $60,000 home. If the home is a $300,000 home, the fee is only I%. Is it fair for someone who can only afford a $60,000 home to have to pay 4%, five times more in fees proportionately, than the owner ora $300,000 home? Legal Co .m3iderations of Impac~ Fees. If an impact fee were legal, there is a very complex formula that must be used to determine what fee could be charged. First you must show a rational nexus that those who pay the impact fee receive a direct benefit that is greater than those not paying the fee. Once you determine the base charge, you must determine the credits that must be deducted from the base fee. Credits are based on the assumption that if new development should pay for its own impact on the school system, then the person paying the impact fee should not have to pay for any existing funding source for the school system that they did not impact, e.g. exi~ing debt. The percent of the county tax rate being used to retire existing den along with annual funds dedicated to school construction would have to be calculated as a credit to thc base impact fee. Any bond issue or ~alcs tax paid on a new home would also have to be calculated as a credit. These credits will severely limit the amount of thc impact fee Lh. at could be charged and could be more than the base fee. -2-