Got a call from a Boise housing construction contractor who’s concerned a new piece of legislation might drive him out of business. He might even be right. And its intended purpose doesn’t require such an extreme result.
The measure in question is House Bill 677, which would allow school districts to impose impact fees on new residential construction within the district. The fees could amount to $2.50 per square foot, or, for example, $2,500 for a 1,000-square foot house. The measure is sponsored by leaders of the property tax renovation effort, Senators Shawn Keough and Representatives Dennis Lake, Mike Moyle and Jim Clark, all Republicans.
The idea behind it is generally unassailable: New growth should help pay for the growing budgets needed by school districts, most notably those like Boise and Meridian where the growth has caused serious pressures. Those new kids moving in – and generally, the new people moving in – create costs and so should have to help underwrite.
Under 677 they ultimately do, but the serious pressure instead is placed on the builders of the houses. The fee is imposed on “construction,” not on sale or occupancy. Ultimately, presumably, the builder would pass the cost along to the developer and buyer, but in the meantime, for months, that’s a high cost he alone would have to bear. In some cases, especially considering the size of houses so often built these days, that could be enough to put some builders out of business. If it were imposed instead at the time of sale, it could be incorporated into house financing relatively easily. And the arrival of the people into the house is more closely tied to the cost to the district than is construction of the building.
The bill is up for amendment on the House floor. Will be interesting to see how, or if, it is amended, as the session nears its frenetic final (well, presumably final) weeks.
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