At some point in recent years, local governments in McLennan County shifted from pursuing strategies to encourage growth to pursuing strategies to smartly manage it. Credit or blame the “Texas Miracle,” Chip and Joanna Gaines’ popular, Waco-based HGTV series “Fixer Upper” and 121 straight months of economic growth nationwide, but the growing pains are all around us. We see it in neighborhood resistance to commercial development at Ritchie and Chapel roads; the tensions over a proposed townhouse development (coming to a head before Woodway City Council on Aug. 12); and, astonishingly, a developer’s breach-of-contract suit against the city of Crawford.
Among the solutions worthy of study and consideration in this volatile mix: impact fees, onetime charges involving new development to help fund the costly infrastructure such as roads, water and sewer lines required to serve it. To quote the Freese & Nichols engineering firm’s Jessica Vassar speaking before the Waco City Council: “This is the basic question. Who’s paying for this growth? Who’s paying for the new infrastructure? Right now Waco does not have impact fees, so the burden of new infrastructure is on your ratepayers and your taxpayers.”
To that end, the council last winter voted to commission Freese & Nichols to study viability of impact fees with an eye toward areas where Waco’s housing market has exploded such as the Highway 84 corridor and China Spring. Waco City Manager Wiley Stem III tells us that a new committee has also begun meeting to explore how much to charge in these fees. A possible overhaul of subdivision ordinances is also in the works.
Some might grouse out of ideological principle (or pure cussedness) about the expense inherent in impact fees, but three factors speak for their prudent employment at this point. First, our city has also embarked on an ambitious and expensive plan to fix or restore crumbling streets and water lines in long-established neighborhoods. At town-hall meetings held by local council members, residents in neighborhoods near downtown voice excitement about this prospect. They’re wary of budding subdivisions whose new infrastructure needs might slacken the pace in these critical improvements.
Second, the Texas Legislature this past spring passed a law tightening property-tax revenue year to year. While the state allows for key exceptions involving new growth, city officials across Texas fear state-ordained property-tax revenue caps might constrain matters when providing new infrastructure and maintaining old infrastructure. Third, one-time impact fees offer the homebuyers in new subdivisions who pay them the benefit of seeing those fees at work on their behalf, at least to a degree, and in a state adverse to property taxes.
Waco Mayor Kyle Deaver is right: Revitalizing neighborhoods closer to the city center while smartly encouraging growth elsewhere is crucial to our city’s overall housing needs. Impact fees strike us as only fair, given other dynamics in play. That said, fees must be calculated so as not to dash the growth city leaders have long sought. After all, this area isn’t witnessing the growth seen in Austin and Frisco — not yet anyway.