Too often, local governments view development as a way to pad government coffers.
Property owners are forced to come up with significant dollars in impact fees, special service area taxes, frontage fees, linkage fees, and the like in order to receive development approval.
Sometimes the fees are valid and used appropriately. Yet, frequently, local government officials view land use as a privilege, not a property right, and these fees are seen as the price paid in exchange for the “benefit” to build on one’s own land. The fees are too often implemented on loose rationales that any development will place a burden upon the community, and spurious figures are frequently used to calculate the perceived burden. Illinois Association of REALTORS (IAR) local Government Affairs Director Conor Brown previously detailed some egregious examples here.
Some fees were adopted under legitimate pretenses but the justification no longer holds up. Few communities reevaluate the need and calculations of these once valid fees – they continue to charge these fees as if they are entitled to the money without justification. Rare is the community that does, in fact, review its existing policies; the Village of Winthrop Harbor being one of them.
Situated in the far northeast corner of Lake County, Winthrop Harbor’s elected officials and staff took a hard look at some of their developer fees. “They took a candid look– not just to ensure fairness – but because they understood that high development costs adversely impact property values and slow growth,” said REALTOR® Gary Powell (Cornerstone Realty Group, Winthrop Harbor).
Since adoption of its school impact fee ordinance, Winthrop Harbor, citing lower property values and declining student enrollment, repealed its school impact fee ordinance. A couple months later the Village examined its sewer and water frontage fees, tap fees, and street frontage fees, and eliminated and reduced those fees due to reduced infrastructure needs. Combining all fee reductions, Pat DiPersio, Winthrop Harbor’s Community Development Director, says costs will be reduced by as much as $7,200; according to the REALTORS® Property Resource, the median estimated home value is $157,000.
Piero Orsi (RE/MAX Showcase, Gurnee), Mainstreet Organization of REALTORS (MORe) Lake County Government Affairs Committee chair added, “Winthrop Harbor deserves to be applauded. What they did not only leads to fairer taxation, but it makes great business sense. They are announcing to the real estate community that Winthrop Harbor is open for business.
Post by Howard Handler, a governmental affairs director working with the Northshore Barrington Association of REALTORS®.