Home Builders Getting Stoked for Impact Fee Battles

Mike Toalson, executive vice president of the Home Builders Association of Virginia, vows to fight the impact fees permitted by The Comprehensive Transportation Funding and Reform Act of 2007. The metropolitan dailies have overlooked this obvious follow-up to the legislative duel of the decade. Fortunately, we have the Culpeper Star Exponent to report the story.

The reason that the Home Builders weren’t a factor in the final days of the debate over the landmark legislation, it appears, is that the association was taken by surprise. Reports Liz Mitchell:

“When the governor released his amendments he included an entirely new component that had never been a part of the bill and no public opportunity for comment,” Toalson said. “What he embedded was new road impact fee authority for 67 localities in Virginia, including Culpeper, Fauquier, Green, Louisa and Orange counties.” …

“He embedded it in the bill HB3202 in a form we could not get out,” Toalson said. “Normally, we get an opportunity to vote but it didn’t happen that way. It was crafted in a way that we couldn’t touch it.”

The Transportation Act allows localities to imopse permit fees but does not require them to do so. That shifts the debate over how to finance growth from the General Assembly to 67 separate jurisdictions. In a meeting with the Piedmont Virginia Building Industry Association, Toalson got the troops fired up for the coming battles.

“Are you going to take the cost of doing new business and just eat it,” Toalson asked the room full of builders, real-estate agents and bankers. “No. You’re going to pass it on to the consumer. And then what happens? All the neighbors’ houses become more expensive. And then what happens? Real estate taxes get higher. But it’s, ‘You’re the bad guy. You’re paying your fair share.’ And it’s coming sooner rather than later.”

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5 responses to “Home Builders Getting Stoked for Impact Fee Battles”

  1. Spank That Donkey Avatar
    Spank That Donkey

    Impact fees equal taxes… and just like a wholesale gasoline tax will be passed along to the consumer.

    What keeps the localities from just cost shifting any impact fees they get to other areas of the budget?

  2. Jim Wamsley Avatar
    Jim Wamsley

    “All the neighbors’ houses become more expensive. And then what happens? Real estate taxes get higher.” Mr. Toalson has a funny view of life.

    Real estate taxes are based on the county budget. The budget goes up and property values go up at the same rate taxes stay the same. Property value goes up, budget stays level, taxes go down. Property value goes up, budget goes up more because of new residents, taxes go up.

    Current residents win when they don’t have to subsidize the home builders. Moving the debate from the state to the counties will help the voter. The homebuilders have built their power around the rural votes. Now the debate moves to the fast growing counties where homebuilders have stockpiled land and homeowners have been hit with higher taxes.

  3. E M Risse Avatar
    E M Risse

    On the last post re 3202:

    At 4:44 PM, E M Risse said…


    “The first thing you can expect is that there will be attacks on all the provisions that pinch to toes of the Business As Usual crowd.

    “The refrain will be “3202 was about transport funding and this does not impact funding so lets get rid of …” Watch candidates line up to sign “Amend 3202 Pledges” to secure contributions for the coming campaign.”

    Do I get a prize for prediction?

    Both Donkey and Elephant Clan members need to monitor canidates on this issue.


  4. Ray Hyde Avatar

    “The budget goes up and property values go up at the same rate taxes stay the same.”


    If property values go up and the tax rate stays the same the taxes paid goes up. Let’s call taxes paid taxes and the tax rate paid the tax rate, so we are clear. I think what you mean is “The budget goes up and property values go up at the same rate tax rates stay the same, but taxes paid goes up.”

    “Property value goes up, budget stays level, taxes go down.”

    Yeah, well, except we know that doesn’t happen. When the politicians see those property values go up, the see it like new revenue and pretty soon they find something to spend it on.

    “Property value goes up, budget goes up more because of new residents, taxes go up.”

    What they spend it on might be new residients, might be not.

    First of all you have to show that ALL the cost is really due to new residents. But even if the budget does go up, taxes don’t go up unless the budget increases more than the taxes paid by the new residents.

    We wnt through this before when EMR questioned how the county budget went up but the tax rate didn’t. It was becasue of all the new taxes paid on new residences.

    Since their homes are the new ones, and the ones artificially inflated by the impact fees, they are going to pay a higher proportion of the total.

    Previously existing homes will go up in value too, but that may take some time before the comparable sales data starts to take efffect.

    Now, you want to talk about sudden capital expenditures (caused by new residents) as opposed to operating budgets, that is something else. But let’s call this what it is, poor planning and inadequate capital budgeting.

    I’m in favor of reasonable impact fees, but I’m highly suspicious about how they are calculated. When the homeowners associations start charging initiation fees (only on new members), is it because the new members have raised the costs of long existing infratructure? No, its because the previous owners weren’t paying enough to keep things up, and now they want to smack it to the new guy.

  5. Larry Gross Avatar
    Larry Gross

    would I be wrong to read between the lines and deduce that those opposed to impact fees were unable to “get to ” Kaine?

    I don’t want to give Kaine too much credit… at least not yet but isn’t it safe to assume that Kaine didn’t blindly walk into doing this?

    In other words.. he and his staff probably knew the terrain with respect to impact fees and had the opportunity to entertain arguments against it…..

    It’s kinda hard to believe that the homebuilders got 100% totally snookered here.

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