Greeley City Council narrowly approves increase to development impact fees. Here’s what that means for you.
By Kelly Ragan
Greeley City Council recently voted to increase development impact fees. This could mean more money for parks, trails, police and fire – but it could also mean newly built homes cost thousands of dollars more.
In a 4-3 vote, the measure passed – with councilmembers Tommy Butler, Deb DeBoutez, Dale Hall and Johnny Olson voting yes, and John Gates, Ed Clark and Brett Payton voting no.
What are development impact fees?
These fees are paid by developers to fund the expanded public services and facilities needed to serve the people who will eventually live in the homes they build. This includes roads, parks, schools, police, fire, water and sewer systems.
The idea is to require developers to fund the expanded services rather than taxpayers.
The money collected from those fees is earmarked for new or expanded facilities and can’t be more than necessary to defray the costs of new development.
How do they work now?
Currently, the residential developments are charged a flat fee. Every new single-family unit, regardless of size, has a $10,668 development fee. Every multi-family unit has a $7,463 development fee.
The proposed changes introduce a tiered structure, with lower fees for smaller square footage and larger fees for larger square footage. Residential Tier 1 fees, designated for developments of 1,200 or less square footage, would come in at about $7,039 per unit. Residential Tier 2 fees, for developments between 1,201 to 1,500 square feet, would come in at $12,396 per unit. Residential Tier 3 feeswould come in at $14,051 per unit. Residential Tier 4 fees, for developments 1,801 square feet or more, would come in at $15,068.
As it stands, Greeley’s current single-family development fee is near the bottom compared to surrounding communities. Fort Collins has the lowest developmental impact fees. Severance has the highest among surrounding communities. Greeley’s current structure puts it above Fort Collins and Loveland and below Severance, Johnstown, Evans, Timnath, Windsor and Berthoud.
The proposed changes would put the proposed tier 1 development impact fees just above Fort Collins and below Loveland, while the proposed tier 4 development impact fees higher up on the list between Timnath and Windsor.
Benefits of increasing the fees
The city has a plan for how It would spend the estimated additional money collected over the next five years.
Parks
According to the city’s estimates, it wants to use $7 million of the new fees for parks. The projects planned for this money include:
Sanborn dog park
Two land purchases for park expansion
Funding for 50% of the Hazelton Park expansion project
Trails
The city wants to use $1.2 million from the new fees to complete the Sheep Draw Trail connection to the Poudre River.
Transportation
The city wants to use $12.7 million from the new fees to eliminate the $2.5 million annual transfer from Keep Greeley Moving to road development. According to the city, this will mean 10.6 miles of pavement rehab and additional concrete work each year.
Stormwater
The city wants to use $760,000 to put toward stormwater projects.
Police
The city wants to use $571,000 to put toward funding a new police facility.
Fire
The city wants to use $287,000 to put toward a new fire station.
Mayor John Gates said he recognized both that the numbers seemed staggering, but also that council had already kicked the issue down the road.
“I simply think we went too fast, and I would have preferred a more incremental fee increase whether that be 50% now and 50% later or some other combination of that,” Gates said.
Councilmember Tommy Butler said he didn’t think fees would either scare developers off or encourage them to build in Greeley – rather that Greeley needed to think of other ways to incentivize the development it wanted to see. Plus, he said, Greeley has made headway in providing affordable housing.
Councilmember Deb DeBoutez noted that everything costs more than it did in 2014, including the cost of developing parks and trails.
“Since 2020, there are 3,200 new housing units that we have to provide services for,” she said. “Our growth hasn’t paid for itself.”
Drawbacks to increasing fees
In practice, some argue the increased fees are passed along to homebuyers – which can result in higher home prices. So, instead of truly placing the cost burden on developers, the burden is on new homebuyers.
“Let’s be clear, these fees that pass will be transferred to the owner of the home,” said councilmember Johnny Olson. “They may hit the developer up front, but they are going to be transferred down to the people buying homes or businesses.”
But Olson said he recognized that the city hasn’t changed its development impact fees since 2014 and knows something needs to be done.
Morgan Kidder, representing Journey Homes, spoke at a public hearing Jan. 17. He echoed Olson’s concerns.
“Those increases will increase the cost of newly built homes in this community,” Kidder said. “We do recognize there is a stop gap and there are issues with the funding, but these fees in front of us tonight seem extremely, extremely extravagant.”
Brett Payton said he hasn’t seen convincing reasons to decide to increase the cost of moving to the community instead of going to the voters and asking them to consider taxes.