Although they tend to be highly controversial, impact fees are a reasonable tool for League City leaders to use in an attempt to ease a couple of problems.
The city council Tuesday took the first of two steps toward eventually charging developers road impact fees, also called capital recovery fees, which are one-time upfront charges meant to offset some of the costs of building and maintaining roads.
The city already has had some success imposing capital recovery fees for water and sewer connections, Mayor Pat Hallisey said.
Impact fees are an attempt to shift part of the city’s costs off of residential taxpayers and onto some other source. In these cases that’s developers, who, in League City, are busy mostly with residential projects.
Making that shift is a reasonable goal for city leaders because about 79 percent of the tax burden is borne by residential taxpayers.
Among the main arguments against impact fees is that they are taxes by another name and that developers will just pass the added costs onto the consumers who buy their products.
Both those objections probably are true, but neither of them proves a case against the fees, and the latter might actually add to an argument for impact fees.
Along with the severely lopsided split between residential and commercial taxpayers, the city is having to manage rapid residential growth.
Its population in January was just shy of 105,000, up from about 102,634 at the same time in 2017, officials said.
Meanwhile, only about 52 percent of League City is developed and projections show the population could rise above 200,000, officials said.
Service areas in the southwestern parts of the city, in particular, could see tremendous growth over the next 10 years, according to a report by Houston-based engineering firm Freese & Nichols.
The two service areas generally west of Interstate 45 could almost double during that time period, increasing from about 32,900 in 2017 to about 64,500 in 2027, according to the report.
Overall, the city’s population could increase to about 143,000 by 2027, according to the report.
Unbridled residential growth presents several problems for city leaders and for the existing pool of property taxpayers.
For every $1 of tax revenue, for example, U.S. cities on average spend $1.20 on services for residential property, compared with only 44 cents for commercial property.
Given that, it’s fair to ask, as some civic leaders have, whether the city shouldn’t take steps to slow residential growth by rethinking incentives such as special taxing arrangements meant to mitigate developers’ financial risks.
It’s a short hop from there to arguing developers should be required to carry a greater share of the costs caused by development.
The inflationary pressure of impact fees on the cost of residential construction might also act in the city’s favor by helping to slow residential growth.
League City leaders must do something to offset the gap between what the city earns from, and what it spends on, each residential taxpayer.
Impact fees might not do the whole job, but they are a reasonable part of the mix. The city council should move ahead with them.
• Michael A. Smith