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Orange County planning officials aim to raise impact fees despite new statutory limitations

Orange County's transportation impact fee ordinance, approved in 2020, expands the urban area and create suburban and rural fee districts.
Orange County's transportation impact fee ordinance, approved in 2020, expands the urban area and create suburban and rural fee districts. (Tindale Oliver)

Developers who have dreaded a pair of impact fee increases scheduled for implementation in Orange County later this month must now brace for those increases to play out in a different fashion — perhaps less than expected, or perhaps not.

A new law signed by Gov. Ron DeSantis late Friday just circumvented efforts by Orange County to try to quickly cement some long-time planned raises to its school and transportation impact fees. HB 337 limits and gradually paces out increases to fees, capping them by no more than 50% of the current rates, but Orange County officials aim to make a case that the region needs looser restrictions.

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Jon Weiss, the director of the county’s planning, environmental, and development services department, told GrowthSpotter the county is anticipating completing a required study and holding necessary public workshops and hearings, so transportation impact fees may exceed the new statutory limitations.

“The bill limits increases to a certain amount but provides the ability for those limitations to be exceeded in certain circumstances,” Weiss said. " ... Our board took a very considerate and deliberate approach to phase in any increases. We thought we had the support of our local construction industry and representatives in our final policy decisions. We will see where our board ends up during our future discussions.”

The school board's consultant is recommending modest changes for most types of housing. The notable exception is studio and one-bedroom apartments, which could see their impact fees reduced by 97%.

Public hearings to review the planned increases and update its transportation impact fee ordinance are being scheduled with Orange County commissioners this month. Weiss said he anticipates holding public workshops in July, and then holding another public hearing in August.

Meanwhile, Orange County Public Schools will be discussing HB 337 at a school board meeting Tuesday.

District spokeswoman Lauren Roth said staff members are currently recommending the Orange County Board of Commissioners modify the impact fee ordinance in order to bring school impact fee increases into compliance with the new law.

“That will move our impact fee increase from June 27 to October 1,” Roth said. “If Option 3 [presenting a case for looser restrictions] was the path forward, it would need to be a two-thirds vote of the BCC.”

Orange County school impact fees have not been updated since 2016. The county would need to act soon so raises to school impact fees may come into full effect next year and ultimately help fund the development of new schools.

Under the new measure, Roth said the board anticipates impact fee revenue losses of approximately $10 million to $12 million. For the fiscal year of 2019 through 2020, OCPS collected about $68.8 million in impact fees.

School impact fees for single-family homes are currently $8,784 per unit.

Orange County approved a tiered rate structure for school impact fees last year, which charges higher impact fees for homes expected to generate more students, so a single-family home between 2,000 square feet to 2,499 square feet would have cost $9,513 per unit, beginning June 27.

A single-family house between 2,500 and 2,999 square feet would have cost $11,402 per unit and single-family homes between 3,000 and 3,999 square feet would have cost $12,015 per unit. Both of those categories exceed the 25% threshold that would require phased implementation over two years, under the statute.

The rate for townhomes was also set to rise by 36%, going from $6,930 per unit to $8,805 per unit, triggering the phased implementation.

The recommended school impact fee for multifamily housing would increase 14%, and high-rise developments would significantly decrease about 95% to $307 per unit.

HB 337 specifies that increases to impact fees must not surpass 50% of the current rate and increases between 25% to 50% must be spread out by four years in equal annual increments. Increases less than 25% can be equally spread out by two years and fees may not be increased more than once every four years.

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Fees vary depending on the size, nature and location of the development project. Last year, commissioners voted to raise transportation fees, modify how certain land-use types would be charged, and create urban, suburban and rural assessment areas.

Single-family homes between 1,201 square feet to 2,000 square feet, that sit in a designated urban area, would see transportation impact fee rates increase by about 118% to $8,218 per dwelling unit from the previous base rate of about $3,760 per unit.

In a sub-urban area, developers would have paid $12,509 beginning June 27, an increase of about 220% from the previous base rate of about $3,900 per unit. In rural areas, developers would have to pay nearly quadruple — $14,294 per unit up from the current $3,898 per unit.

GOBA spokesman Lee Steinhauer said the legislature’s intent is to ensure that impact fees are predictable and digestible.

“Under the law, fees can go up incrementally every single year, to the point of even doubling, if not more, every eight years or so,” he said in an email to GrowthSpotter. “As such, the law still more than allows for the adequate funding of infrastructure, while also reasonably balancing the dire need for housing affordability and predictability for the housing industry.”

When asked if GOBA would support Orange County and its quest to raise transportation impact fees beyond the limitations of the law, Steinhauer said he wouldn’t be able to adequately respond until he knew what Orange County constitutes as “extraordinary circumstances,” something the law requires from local governments to prove if its wishes to exceed the impact-fee limits.

“Without knowing what they will argue constitutes ‘extraordinary circumstances’ I cannot adequately respond yet. Though, I would say that GOBA believes that the legislature intended extraordinary circumstances to be a very high hurdle, and only intended for the very rare exception, not to be the rule,” he said.

Developers collectively paid about $27.7 million in transportation impact fees in 2019.

Have a tip about Central Florida development? Contact me at arabines@GrowthSpotter.com or (407) 420-5427, or tweet me at @amanda_rabines. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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