- Quotes NO independent economics or legal experts.
- Quotes NO public interest advocates.
- Quotes NO one from government.
- Quotes NOTHING from findings of fact and conclusions of law by St. Johns County Commissioners in their enacting ordinance insufficiently increasing impact fees, which are NOT high enough.
Builders worry impact fees will price more customers out of St. Johns County
Stuart Korfhage
Posted at 6:29 AM
Updated at 6:29 AM
St. Augustine Record
While home building leaders in Northeast Florida can’t predict all of the results from the rise in residential impact fees, they are sure about one thing: Buyers are going to pay more.
Days after the St. Johns County Commission voted to implement a new fee schedule for residential and commercial construction, industry leaders voiced their concerns about what will happen.
Joe Blanco, division president of ICI Homes’ North Florida Division, said the higher fees — increases of about $1,500 to $9,600, depending on the size of the home — are going to add a lot of pressure to the local market.
Even before the new fees go into effect, which will begin to be phased in July 1, St. Johns County already had high home prices compared to the surrounding area. According to the Northeast Florida Association of Realtors, the median home price in this county (new and existing) for 2017 was $312,500 compared with $180,000 for Duval; $189,000 for Clay; and $229,000 for Nassau.
ICI builds in all of those markets, and Blanco said some buyers might start looking at places other than St. Johns County when shopping for a new home.
“It’s still a great county, and the schools do so much for you where people want to be there,” Blanco said. “It’s still tough when you try to explain why they’re paying so much more compared to outlying counties. That’s still a little bit of an issue there.
“On the developer side, you have a lot more developers looking at Clay County and Nassau County now because St. Johns County’s prices are getting so high. To have a first-time home buyer in St. Johns County is kind of getting tough. It’s getting tough to meet that price point where they can afford it.”
Chris Dostie, president of Dostie Homes and president of the Northeast Florida Builders Association, said he’s also concerned about any additional costs passed on to the customers.
“Every time a home price is raised, it eliminates somebody from the marketplace,” Dostie said. “The increase is significant. It’s something that ultimately the end user, the buyer, is paying for.”
Blanco said the fee increase in homes of 2,501 to 3,750 square feet of about $6,000 to a total of $19,924 will affect the highest number of his company’s clients.
“That’s really the sweet spot for the market, that 2,500- to 2,600-square-foot range where more of your medium income buyers are,” he said.
Builders have pointed to the fact that Duval County has no impact fees as one of the reasons homes are less expensive there. And in Nassau County, the fees are much lower.
But the currents fees — $9,770, or $13,952 for homes larger than 1,800 square feet — have done little to slow residential growth in the county. St. Johns County had more new home permits issued than Duval County last year.
For 2018, St. Johns County is also off to a blazing start. There were 341 residential permits issued in March to bring the total to 1,010 for the calendar year. Duval County issued 506 permits in the first months of the year, according to NEFBA. March numbers have not been released for Duval.
“The county is a very popular place for developers to develop, for builders to buy lots to build,” Dostie said. “I think there will naturally be demand to be in St. Johns County, but you cannot ignore the fact that every time you raise prices it eliminates people’s ability to purchase within the county.
“It would be naive of anybody to think that this increase is not going to eliminate a sizeable group’s ability to purchase and live in St. Johns County.”
With the impact fees set to start rising by this summer, Blanco said he expects a surge in permitting activity in St. Johns County.
“The building department is going to be very busy until July 1, for sure,” he said.
Dostie said he wishes it didn’t have to be this way. He said the county government is putting a lot of pressure on the housing industry to pay for so much of the cost of growth. The consequence is that housing costs for everyone could become increasingly expensive.
“Every county government ... should be trying to provide a climate that enables all the developers and builders who would go and purchase and invest to build in a given area so the first-time home buyer and the luxury home buyer have a spot within the county,” Dostie said.
Instead of just raising the impact fees, Dostie said it might have been better for the county to look in other places for revenue, such as the gas tax or sales tax.
“It appears to me there are more broad-based ways to meet the funding for the growth that is being created within the county,” Dostie said. “It always is difficult for me to stomach as a home builder when it feels punitive to my industry.
“Any time you target one sector of people and say that’s how we’re going to fund growth or keep pace with growth, it’s punitive (sic).”
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