For the average single-family home built in up-and-coming areas of Fort Worth, taxpayers pay almost 70% of the bill for road infrastructure needed to support the new growth — often for  years after the home is built. 

Those numbers are based on impact fees, or the fees that developers must pay to offset the cost of road construction. Those rates have hovered about 30% of the maximum allowable fee since 2008. Now, the Fort Worth City Council is considering adopting a dramatic increase to that rate. 

City staff are recommending that Fort Worth increase impact fee rates so that developers pay 80% of the maximum allowable fee for residential development and 55% of the maximum for commercial development. Several council members appeared ready to break with the precedents of previous councils and approve an increase to the impact fee rate. 

“The gap between what we need and what we can build, it’s just gotten wider and wider over time, ” said Jennifer Roberts, assistant director of the city’s development services department. “So the intent is to try to narrow that gap.”

However, concerns from developers and a lack of consensus from council has prompted members to delay deciding on impact fee rates until November. State law requires the council to finalize the rates by January.

“We just can’t keep up the way we’re doing it now. We all know that,” Mayor Mattie Parker said at a work session discussing the proposed rates. 

The sticking points are the timeline for implementing the rate increase and the proposed rates for industrial and commercial development. Council members still plan to adopt a study on the impact fee and approve the maximum fee the city is allowed to collect on Oct. 25. 

The study found that the city will need $3.15 billion in new thoroughfares, based on the city’s master thoroughfare plan. About $2.85 billion of that construction is recoverable through the impact fee program. Building roads through impact fees is faster and cheaper than the alternative — building the roads through bond programs when taxpayers foot the bill. 

“We have to build the infrastructure as we build the developments,” said Michael Crain, who represents several high growth areas in west Fort Worth. 

If you go:

You can attend the City Council meeting at 10 a.m. Tuesday, Oct. 25, at City Hall, 200 Texas St, Fort Worth. Sign up to speak or comment here.  

Fort Worth is split into two categories: no fee service areas and fee service areas. No fee service areas are where roads are already built out. In areas where fees are levied, the city calculates a maximum allowable fee based on the projected costs of developments in the area divided by the cost of construction in the area. 

State law requires the city to re-evaluate those service areas and the maximum allowable fees every five years. 

The map depicts the service areas proposed in the 2022 Impact Fee study. Gray areas will not levy an impact fee. The city is adding areas L, in east Fort Worth, and W, in southwest Fort Worth, to the list of no fee areas. 

Council members agree on the proposed service areas, Crain said. 

“We’ll do some work over the next month to come to a consensus of what makes the most sense for the city, and really the balance that needs to happen between what builders (and) developers should pay …  versus what should be continued to be (paid for) by the citizens or the city,” Crain said. 

Several interest groups have weighed in on the staff recommendation. The Greater Fort Worth Builders Association is in favor of just a 40% Impact fee rate for residential with an incremental increase. The Real Estate Council of Greater Fort Worth is in favor of the 80% residential impact fee but advocates for a 40% commercial impact fee, among other caveats. 

“We really believe that a higher rate on residential (housing) is important, ” said Karen Vermaire Fox, executive director of the Real Estate Council. “Because we believe that the people using those roads need to help pay for those roads.”

The Real Estate Council sent a letter to staff in September laying out other concerns, including a potential small business exemption for developers with 25 or fewer full-time employees and a lower rate for commercial and industrial development. 

“Industrial is a significant market where we live, we make a lot of revenue off of that, and so how do we account for that,” Fox asked. “How do we not stop those deals from happening? Because we don’t want them to just go to Burleson.”

When council members initially set the impact fee rates in 2008, their judgment was colored by the 2008 recession. City council members at the time were reluctant to do anything that would discourage development. Another possible economic downturn, which is already affecting cost of living, is causing council members to reconsider raising fees dramatically, citing concerns the costs will be passed on to homebuyers. 

“Any time we were raising rates, ultimately that cost is going to be passed back to the consumer,” Crain said. 

Builders are concerned that the imposition of higher impact fees will price their customers out of the market, said Travis Clegg, chairman of public policy at the Real Estate Council and Builders Association. Clegg also leads the city’s Development Advisory Committee, a city-manager appointed group that meets monthly to discuss making development more efficient in Fort Worth. 

“Construction prices are still extraordinarily high,” Clegg said. “Land values are still really, really high. It’s just going to further exacerbate, and unaffordability issues when it comes to the homebuilding side of things.”

Home prices have increased precipitously despite impact fees remaining static, staff members point out. Low impact fees also impact residents’ wallets in other ways, Roberts said, through higher taxes and longer commutes because of traffic jams. 

This graph depicts median house pice over time, compared with transportation impact fees.

Development organizations are advocating to push the implementation of any rate increases to June 2023, reducing the impact on builders and developers with projects in progress. 

Crain said he will meet with the Fort Worth Builders Association to discuss its concerns. He has not heard from neighborhood associations or individual residents about their concerns about the impact fee rate, Crain said. 

Fort Worth staff has worked to reach out to industry groups and neighborhoods alike, Roberts said. The North Fort Worth Alliance, which represents the area set to receive the most new thoroughfares through the city’s recently passed bond, supports the staff’s recommended rates, according to a letter sent to staff and council members. Residents broadly support staff’s recommendation, surveys found. 

 “We have made a concerted effort and put a lot of focus on the communication of this topic,” Roberts said. 

Whether through residents’ tax bills or the cost of homes, roads need to be built in Fort Worth, Clegg said. The key is striking the balance between the cost of development and the final tax rate. 

“I don’t envy our council and our mayor for having to make that call,” Clegg said. “We have parts of our city that desperately need roads.”

Editors note: This story was updated to clarify Crain’s statement on feedback from constituents.

Rachel Behrndt is a government accountability reporter for fortworthreport.org. She can be reached at rachel.behrndt@fortworthreport.org. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.

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Rachel BehrndtGovernment Accountability Reporter

Rachel Behrndt is a government accountability reporter for the Fort Worth Report in collaboration with KERA. She is a recent graduate of the University of Missouri where she majored in Journalism and Political...