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New Osceola school impact fees could prompt shift in apartment development trends

Projects like ADËLON's 225-unit apartment building in Kissimmee, which is mostly studios and one-bedroom units, could save $2 million in school impact fees.
Projects like ADËLON's 225-unit apartment building in Kissimmee, which is mostly studios and one-bedroom units, could save $2 million in school impact fees. (ADELON)

A proposal from the School District of Osceola County to reduce school impact fees by 97% for studio and one-bedroom apartments will likely incentivize multifamily developers to rethink how they design new apartment complexes going forward, with an emphasis on smaller units.

But it could also lead to even more motel conversions along the W192 tourism corridor.

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The SDOC is in the midst of a study to update its impact fees, which are the highest in the state of Florida. Up until now, SDOC has charged $11,362 per unit for all apartments, regardless of size or bedroom count. Consultant Tischler Bise found that the student generation rate for studios and 1-bedroom apartments was statistically insignificant at about one student for every 100 units.

The latest draft of Osceola County's school impact fee recommends minor adjustments to the rates for new homes, townhomes and apartments, but a new category for studio and one-bedroom apartments would result in a 97% fee reduction.
The latest draft of Osceola County's school impact fee recommends minor adjustments to the rates for new homes, townhomes and apartments, but a new category for studio and one-bedroom apartments would result in a 97% fee reduction. (Tischler Bise c/o SDOC)

The consultant has recommended dropping the impact fee for those units from the standard multifamily rate to $326 per unit.

For developers with multifamily projects in the pipeline, the potential savings could be substantial.

The Dinerstein Companies, for example, is in permitting with the City of Kissimmee for a new 400-unit apartment complex in the Flora Ridge PUD, along the Ball Park Road extension. The projected development matrix calls for 40 studios and 176 one-bedroom units. If the school board approves the recommended rate, it could reduce the impact fees for the project by nearly $2.3 million.

ADËLON is planning a 225-unit apartment building on a vacant lot north of its Wyndham Kissimmee Celebration hotel. With the development matrix calling for 64 studios, 119 one-bedroom units and 41 two- and three-bedroom units, the developer could see a windfall in savings. Instead of paying $2.56 million for school impact fees, the total bill would drop to $525,500.

Representatives for ADËLON met with Osceola County's Development Review Committee this week to discuss the site plan for the 225-unit apartment building.
Representatives for ADËLON met with Osceola County's Development Review Committee this week to discuss the site plan for the 225-unit apartment building. (ADELON)

Scott Whittaker, founder of The Latigo Group, said the prospect of a reduced school impact fee would definitely influence his design decisions on future projects. Latigo and Elevation Development recently started site preparation for the first phase of their Ballpark Village apartments. “We were grandfathered with the 2019 rates for phase 1, and we’re fine with that. But that would dramatically impact phase 2. We would probably do more ones and studios, for sure.”

The updated impact fee study was presented to the county’s Growth Management Task Force on Thursday. The school board has a workshop scheduled for June 15 but has not scheduled a vote on the new rates. The impact fee ordinance needs to be approved by the Board of County Commissioners before going into effect.

The proposed rate is comparable to what Orange County will charge for high-rise apartment buildings, $307 per unit, when its new ordinance goes into effect on June 27. Orange County created a separate category for the housing class that typically doesn’t attract families with children, but it will raise school impact fees from $5,919 to $6,751 per unit for non-high-rise apartments.

In Osceola, the district is projecting the county population will grow by 32% through the end of this decade. That translates to 123,000 more residents and 52,600 new homes by 2030 — and 15,350 new students.

SDOC will be in building mode over the next three years, with plans to open a new K-5 at Celebration Island Village in 2023. In 2024, the district will open three new K-8 schools, each designed for 1,274 students, at the Knightsbridge site on S. Poinciana Boulevard and in two master-planned communities: Kindred and Sunbridge.

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @byLauraKinsler. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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