Waving Affordable Housing Fees

The balance between affordable and market-rate housing is a tricky one. So is the balance between charging fees to pay for housing projects and keeping development costs competitive in a given area. In an attempt to maintain the competitive balance, some city and county Governments are reducing or eliminating housing fees in the hopes of…

The balance between affordable and market-rate housing is a tricky one. So is the balance between charging fees to pay for housing projects and keeping development costs competitive in a given area. In an attempt to maintain the competitive balance, some city and county Governments are reducing or eliminating housing fees in the hopes of encouraging further development.

Frederick County, Maryland commissioners – for example – recently voted to waive impact fees for affordable housing developments, in an effort to reduce project costs and make the area more attractive to developers. One of the commissioners also indicated he may move towards eliminating or reducing all impact fees next year. The measure passed with a 3-2 vote, but included one stipulation – a nonprofit organization has to be developing the project, and the housing has to be priced for residents making 60 percent or less of the area's median income.

Housing advocates view the decision as an important step towards making more affordable housing available in Frederick County. Habitat for Humanity's executive director for Frederick County said the waiver could save them as much as $ 30,000 in fees – and that's before they ever break ground on a project.

The only real push-back on the decision came from a commissioner concerned with how the loss of revenue will affect the county. Although elimination of the fee is good for developers, there is currently no budget offset to make up the lost revenue. The Commissioner President, however, believes that the waiver's limited scope will have minimal impact on the county's budget. The affordable housing impact fee waiver went into effect at the beginning of the year.