KCBD INVESTIGATES: Impact Fees and the Future of Lubbock

Updated: Oct. 15, 2020 at 7:47 PM CDT
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LUBBOCK, Texas (KCBD) - “Will people still build and will people still come," said Thor Thornhill, President and CEO of HMT Engineering and Surveying in New Braunfels, Texas.

New Braunfels is the second fastest growing city in the country. In 2007, the city adopted impact fees in order to generate the revenue to pay the infrastructure costs of new development. But, he believes those fees have put some home buyers out of the market.

A local builder, Jordan Wheatley, and developer, Robert Wood, have voiced these concerns to the Lubbock City Council, following a two-year study by the Capital Improvements Advisory Committee, or CIAC.

“It’s all ultimately passed down to the final product,” Wheatley impact.

And, what effect does this have on the market?

“So if Jordan, or myself or any other land developer puts 100 lots on the ground and we’re selling them at a rapid rate currently, if that slows down by 30%, is that really good for Lubbock?" asked Wood.

But, Division Director of Engineering for the City of Lubbock, Mike Keenum says it does not deter commercial growth.

“As we look across the state, it has not deterred growth. That’s one of the things we’ve looked at and the advisory committee’s looked at, and evaluated what other cities have done, because we absolutely don’t want to stop growth,” Keenum said.

In fact, he says commercial development expects impact fees, “When HEB came in, one of the first things they asked us is, “what are your impact fees? We have to convince them that there are none because that’s how they do business. They expect that.”

But, while H-E-B may expect it, can home buyers absorb the cost?

“The belief there is that residential doesn’t support itself the same as a tax base as commercial - however, I would argue and my clients would argue, it takes both, because with no rooftops, you have no commercial,” Thornhill said.

“Other cities have adopted impact fees, have started low and then the graphs have always shown increases over the years. Our fear is what happens when we get a new council and they see this opportunity to increase impact taxes,” Wheatley said.

While all parties agree growth must be funded, “That growth is great, and we need that. We’ve gotta be able to fund it somehow. So, the question is, how do you fund it," Keenum asked.

“I will say, you have to generate the money somewhere," Thornhill said.

Our Investigates team learned the chief concern for development is how to plan for the future.

“We as an association and a community are going to have to monitor this from here on out, as the council changes, as new city managers come in, as leadership changes," Wood said.

A message Thornhill echoes, “So, if I really answered the question honestly, I’m not against impact fees, I’m against a crazy increase quickly.”

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