Osceola County could double mobility fees and require earlier payment

Osceola County Commissioners could strike another blow to the local homebuilding industry next year as the county looks at potentially doubling mobility fees and forcing builders to carry those costs for months.

Commissioners this week directed county transportation staff to bring back an ordinance in three months that would require builders to pay mobility fees when they receive their building permits. The county currently collects the fee, which is largely a pass-through to buyers, later at the Certificate of Occupancy (CO) stage.

A draft mobility fee schedule shows the fee for a single-family home would nearly double -- from the current $4,585 to $8,688. The fees for multifamily projects would go from $3,203 per unit to $6,070. Mobility fees for commercial buildings, restaurants, medical offices and hotels also would nearly double.

The county would maintain a 25 percent discount for mixed-use projects and 50 percent discount for Transit-Oriented Development projects.

County Commissioners adopted the mobility fee ordinance in 2015 to replace transportation impact fees, which the board suspended in 2011 and later repealed. Most jurisdictions update their mobility fees every three years, so the county is due for a revision in 2018.

The fee hike would likely coincide with significant increases in school impact fees, as GrowthSpotter reported earlier this month. Commissioners have also voiced support for a revision to the school impact fee ordinance that would require payment at the permit phase instead of CO. 

The Greater Orlando Builders Association has said the mobility fee update is only the latest in a succession of anti-growth moves by Osceola County that could backfire.

"If you want and need affordable housing, which is what I’ve heard from elected officials, then you’re doing all these other things that appear to be counter to that proposition," GOBA spokesman Lee Steinhauer said. "The moratorium, the design standards and higher fees will raise the price of homes."

He also noted that Osceola County is looking at earlier collection of mobility and impact fees at a time when Orange and Seminole counties are moving away from those practices. 

"I know Osceola County is having issues related to growth, and they have problems they’re trying to tackle," Steinhauer said. "We’d like to be part of the solution to that. At the end of the day, you also need growth there. You need tax revenue."

He said that national production builders can absorb those costs, but the earlier collection of impact and mobility fees can have a devastating effect on independent homebuilders. 

"If you're a small builder, you really can't borrow that money," Steinhauer said. "It can actually kill a project."

County Manager Don Fisher advised commissioners to let the staff come up with alternatives that would protect smaller builders. One solution might be to allow the later payment -- at the CO phase -- for subdivisions less than 100 lots. 

Tawny Olore, the county's director of transportation, told GrowthSpotter she would present several options for commissioners to consider regarding timing of the mobility fee collection. 

But one thing that isn't under consideration, at least now, is allowing non-residential developers to pay mobility fees at the CO stage, Olore said. Like production builders, they would be charged at the building permit stage.

Investors Realty Chairman John Marling, who was planning a $50 million Class A apartment complex adjacent to NeoCity, said the mobility fee hike, combined with the proposed school impact fees, are very likely a "deal breaker" for him -- especially if he has to carry those costs for the 18-month construction period.

"We're looking at $18,000 per unit in impact fees and $15,000 in land costs," Marling said. "I just can't see a lot of multifamily being built out there in that area. You can build it and lease it up, but you're not going to make any money for your investors."

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

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