The root of all evil

A rant to rave about…

It’s been suggested that I’m attempting to grow and cultivate a political base of support for public office. Well, let me throw a piano out the window of that office: I think impact fees are the root of all that’s evil in the sprawling ‘burbs of Chicago.

Sycamore is looking at possibly reducing impact fees charged on new homes built in its subdivisions. Shodeen Development, is seeking a reduction in hopes doing so will kickstart some sales in their subdivision. The reduction would apply to all subdivisions and would be temporary.

In the total budget of a school, park or sanitary district impact fees are considered insignificant as a revenue source. Even as a percentage of cost in the final price of a new home impact fees aren’t too bad but $5-$10k is noticeable. Right now for a builder sitting across the table from a construction loan officer that kind of money might be a deal breaker.

So I understand where Shodeen’s coming from.

I also understand those who will likely show up at the Sycamore city council meeting Tuesday night to voice their displeasure and opposition to the proposal. I especially sympathize with those who paid those impact fees back when the times were a booming and are now trying to sell those homes because they can’t afford the taxes.

For those trying to sell a home in this market any sign of competition would be unwelcome but comparing home values against the costs of building a new home is better than it is against a foreclosed home.

Impact fees are a political currency that was used to control growth back in the boom days. They’re worth about as much as a counterfeit dollar for serving that purpose. A pattern of annexation approvals preceded or followed by an increase in impact fees might suggest sleight of a hand holding a carrot stick.

For a builder who completes ten or less new single family housing starts a year (which fits most of those in DeKalb County) impact fees were an obstacle even when the banks were loaning money. When the goose was laying golden eggs the Big Builders offered “above and beyond” impact fees just to “raise the bar.”

It is what it is.

Now, ten new housing starts would tickle just about anyone swinging a hammer. Unfortunately, reducing the impact fees will likely not induce sales because a one-time upfront fee is nothing when compared to the ongoing annual property taxes the buyer of a new construction home is subject to.

The sleight of hand told us they were controlling the costs of new growth. At the same time they were selling debt bonds based on new construction EAV projections because the money just wasn’t rolling in fast enough to keep up with the Joneses in the sprawling suburbs of Chicago.

That’s a big reason why we have astronomical property taxes (the guarantor of General Obligation Bonds). And for many who paid impact fees when the getting was good, now watching their home values sag against the backdrop of foreclosures, the weight of the fixed costs of property taxes — subject to COLA, of course — is heavier than their unemployed brother.

Those fooled by the sleight of hand need to realize they are the solution. We hold the highest office of citizen. We must demand finance reform and that includes accountability and then vote for it.

We need to go beyond their hand and in their face.