Los Lunas Village Council waives impact fees to bolster development
The Los Lunas Council approved an amendment to the impact fees ordinance at its July 17 meeting. The amendment offers a two-year moratorium on the fees for new residential construction.
The village council lowered the impact fees to zero in that category to encourage residential construction.
The number of building permit applications have dwindled over the past two years, which has had a negative effect on both utility revenue and gross receipts taxes.
"The largest impact we've had on our gross receipts tax is a decline in our construction industry of about $2 million a year," said Los Lunas Village Councilor Charles Griego in a phone interview.
"And this is a way, hopefully, to try to encourage the construction to come back to our community."
Albuquerque and Mesa del Sol have waived or modified impact fees to attract new development, and the village is hoping to do the same.
"Hopefully it will spur new construction, which hopefully creates jobs and hopefully increases spending in our community," Griego said.
Currently, no impact fees are being paid because there isn't any new residential building construction, he said.
Most of the information on the subject was given in three budget workshops in June, and staff were directed to develop an amendment to the ordinance.
The category of the impact fee represents a three-fourths utility-service-meter fee for new residential construction, said James Blasing, director of utilities.
Vanessa Alarid, director of government affairs at Home Builders of Central New Mexico, encouraged the council to act in favor of the impact fee moratorium.
"There are particular sets of data that certainly encourage and demonstrate that impact fees (moratoriums) will in fact help housing and help the economy, and certainly the general fund of the municipality," she said.
She represents Home Builders in Valencia, Torrance, Bernalillo and Santa Fe counties.
A few municipalities, including Albuquerque, Rio Rancho and Santa Fe, are working on or implementing impact fee moratoriums.
Developer Max Kiehne expressed his support for the moratorium.
He brought graphs depicting the housing business in the Albuquerque metro area over the past few years that show a positive effect of lowered or waived impact fees, Kiehne said.
"In 2009, when Albuquerque chose to reduce their impact fees … housing permits increased," Kiehne said. "You can see that they work."
Another local developer, Scott Edeal, just signed a contract on 119 lots in Los Lunas and is waiting to close.
"My vision was to help the local builders start building again in Los Lunas, and this would really help a lot," Edeal said.
"If we do that to encourage building … and it basically get's construction going, get's demand going for housing, then our community gets more people paying water bills, more people paying sewer bills, more people spending money at the grocery stores, at the restaurants and has a large impact through our whole community," Griego said.
"We're in a situation where we have to do something."
The amendment was approved unanimously and will be reviewed as directed or after one year to evaluate the response.
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