Florida Impact Fee Moratorium?

Florida’s new governor is reportedly going to push for a two-year moratorium on impact fees in the state once the legislature is back in session.  This move is being pitched as part of package of measures to stimulate the economy and create jobs.  I am not sure if this would be a moratorium on new or increased fees, as has been in place in Arizona for the last two years, or if it would require local governments to completely suspend their impact fees.  Either way, it is misguided.  Many Florida cities and counties have reduced or suspended impact fees in recent years in the vain hope of stimulating growth.  The lack of success in such efforts was recently documented by a paper by presented at the last GIC conference (available by clicking on conferences > 2010 above).   This lack of success should be no surprise, since Florida’s economic problems were caused by over-building, not overly-high impact fees.  Until the surplus housing and building inventory is absorbed, the pace of construction will remain very low, and so it should.  This effort to artificially stimulate construction in the absence of market demand will not work, but it will rob local government of what little impact fee revenue they are currently getting.

Clancy Mullen, posted January 24, 2011

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