Future homebuilders in town will pay 40 cents a square foot for building permits and 20 cents a square foot for plan reviews, fees that administrators had based on the cost of construction.
The council approved the change late Tuesday night, just a short time after Texas Gov. Greg Abbott signed House Bill 852, a piece of legislation that forbids cities from using the cost of new construction or improvements to determine the cost of fees.
The law was an attempt to end hidden fees on homeowners and builders by changing the way building permits are structured, according to a statement on state Rep. Justin Holland’s website. Holland, a Republican and real estate broker representing Rockwall County and part of Collin County, authored the bill.
The main effect of the law, however, will be to disguise the value of a home, said David Hoover, the city’s director of planning and development.
“I’m not sure what the exact reason for that would be, but to me the intent is clearly to keep that information private,” Hoover said.
The text of the bill does explicitly prohibit a municipality from requiring the disclosure of information about the value or cost of construction of a residential dwelling.
And while sponsors of the bill have argued the main purpose was to improve housing affordability it would not have that effect, city leaders said.
City administrators have said they don’t think the change will alter the cost of a house or how much they receive in revenues.
Under the new legislation, city administrators can’t consider the value of a dwelling or the cost of improving a home when pricing the permits or inspections. League City will base the permit fees on square footage.
The value of a house is just one of many methods cities across the state use to calculate building fees, but it’s one used by several county municipalities.
Unusually, Abbott signed the bill May 21, shortly after both houses of the Texas Legislature approved it, and had it taken effect immediately. No representative from Galveston County opposed the measure and none responded to requests for comment.
The quickly enacted new legislation left some county municipalities that based their fee structure on home valuations scrambling to bring changes before council, while some cities hadn’t even heard about the bill.
Before Tuesday’s changes in League City, the builder of a $293,850 home would pay about $2,248 in fees, not including water meter and service connection fees, city officials said. Of that total, building permits accounted for about $1,042.
League City expects to collect almost $3 million in building permits, but doesn’t expect that to change even with the necessary changes to the city fees, Hoover said.
Mayor Pat Hallisey before Tuesday’s meeting decried the bill as just another example of the state imposing restrictions on how cities operate.
Several other council members during a part of the meeting reserved for council comments echoed Hallisey’s sentiments, though speaking generally.
“A lot of smaller municipalities can’t keep jumping through these hoops, especially when they don’t even know the bills are on the books,” Councilman Larry Millican said. “Our legislators need to know local control is important.”
Because the bill prevents cities from determining specific values of structures during construction, it prevents central appraisal districts from using that information for tax purposes.
Representatives for the Galveston County Central Appraisal District did not respond to a request for comment about how the bill would affect their work by deadline Wednesday.