HIGH POINT — Home builders could face a tenfold increase in certain city fees under a recommendation from High Point officials, according to a local lobbying organization for the real estate development industry.
A new “system development fee” model proposed by the Public Services Department would raise the cost of water meters from about $43,000 to $450,000 for a planned subdivision on Penny Road.
The cost for the same type of infrastructure for a 164-home project at N. Main Street and Delray Avenue would go from $99,814 to $524,144.
Both examples were provided by Judy Stalder of the Triad Real Estate and Building Industry Coalition, who said the new fees, as proposed, would increase the price of a newly constructed house in High Point by about $3,200. A spike of this magnitude could price some buyers out of the market and lead developers to do their projects in other cities, she said.
“I’m not saying that our people don’t want to build in High Point,” Stalder recently told the City Council Finance Committee, which is considering the new fees. “What I’m saying is, we need to think about how we implement these fees and figure out a way to do it so that it doesn’t affect development going forward.”
City officials said the new fee model, which has to do with the way developers are charged to connect to High Point’s water and sewer systems, is needed to comply with recent state legislation.
The idea is to have developers, rather than current water and sewer users, bear more of the cost of growth.
Stalder said her organization supports the system development fee model, but not the amount that the city is proposing to charge for projects.
Interim City Manager Randy McCaslin said the scale of the proposed increase is designed to help finance $150 million of water and sewer upgrades over the next five years.
“These are projects that have to happen,” he said.
Without additional revenue from increased fees, existing water and sewer customers will see their rates go up, he added.
“If we leave revenue right where it is, then I think you can expect to see the 4 to 6% rate increases probably go up higher because of the substantial cost of capital projects you have over the next five years,” he said.
The new fees would make High Point’s charges comparable to what Greensboro and Winston-Salem charge, which officials cited as justification for the scale of the proposed increase.
But Stalder said this would make High Point less competitive with these cities, each of which is twice as big as High Point and has other advantages.
“I think you can talk to any developer, and they will tell you that Greensboro’s calling them on the phone every day to see what they can do in their town. I don’t know that there’s anybody in High Point that does that same kind of outreach to developers,” she said. “Winston doesn’t have to. Winston’s gotten to the point that they can expect developers to come more like (they come to) Raleigh and Charlotte.”
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