Developers can be hard cats to pity, but it does kind of suck to be a builder right now. On top of the woes that come from a slowed real estate market, increased construction costs and tightened credit, fees are going up for a slew of government services, from building inspections to sewer hook-ups.
The most recent increase came last week, when the Albemarle County Board of Supervisors voted unanimously to raise a wide range of fees for building inspections—the first comprehensive update since 1991—in order to bring up cost recovery to nearly 100 percent from 58 percent. All told, the increases bring up the cost of building fees for an average new house to $1,086 from $628 and are expected to bring in an extra $380,000 to county coffers this year. The money will go to two more full-time positions.
 “There could not be a worse time for the county to contemplate raising building fees,” said Charlie Armstrong, speaking on behalf of the Blue Ridge Home Builder’s Association. |
“There could not be a worse time for the county to contemplate raising building fees,” said Charlie Armstrong, speaking on behalf of the Blue Ridge Home Builder’s Association. “It’s just a really tight time for builders, cashflow wise. …[The fee increases] may be the final blow that pushes them out of business.”
Even Ken Boyd, the supervisor most associated with being pro-business, wasn’t swayed. “This isn’t an attempt to get more money, this is cost recovery,” said Boyd. “We’re going to have to be more conscious of that if we’re going to be fiscally responsible.”
“I wouldn’t want to ever be accused of putting a small builder out of business,” said Supervisor David Slutzky, “but if there’s somebody doing that, I think it’s the larger builders and their failure to scale back the scope of their new projects going into an uncertain time in the real estate economy, the consequence of which is there is a huge excess of inventory right now.” Take that, Ryan Homes.
Regardless of who’s to blame, this isn’t the only fee increase that homebuilders are facing. In September, the combined water and sewer hook-up fees to develop a lot and build a new house in the county’s urban ring will go up 13 percent to $20,600 from $18,300. In the city, water and sewer hook up fees went up roughly 50 percent in July. Additionally, the city’s Neighborhood Development Services raised building and inspection fees in July enough to bring in an extra $100,000 annually.
Yet since it’s a lot easier to feel sorry for working- and middle-class folks rather than developers, many building advocates instead fly the flag of affordable housing. At the county Board meeting, both Armstrong and the Free Enterprise Forum’s Neil Williamson insisted that the pocketbooks of the buyers would ultimately be the ones affected.
“We know these fees end up getting tacked on to the price of a house,” said Armstrong, speaking only for himself and not the Blue Ridge Home Builders. “These additional fees will be yet another hindrance to affordable housing.”
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