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The last time Flagler County issued more than 16 permits for homes within a single month was in June 2006 — until now.
The numbers aren’t final yet, but at the beginning of this week, Flagler County had issued 17 permits for homes. Eight more were in the application stage, and could be issued before the month ends.
“That’s a big, big number,” said Jason DeLorenzo, government affairs director for the Flagler Home Builders Association, as well as a member of the Palm Coast City Council. He attributes the increase in part to the moratorium on transporation facilities and parks and recreation impact fees that the Flagler County Board of County Commissioners enacted in October.
The moratorium brings a savings of about $1,700 to those building homes in Flagler County, but outside of the Palm Coast or Flagler Beach city limits.
“Suspending these fees for Flagler County was an effort to add another tool to the tool box of economic development countywide,” said Nate McLaughlin, chairman of the County Commission. “New housing starts appear to be gaining, but may continue to fluctuate with the financial markets for a while.”
When the County Commission was deciding whether to pass the two-year halt to impact fees, the Palm Coast City Council and the Flagler County School Board were considering implementing similar measures. Supporters argued that a moratorium would catalyze construction in the area. Palm Coast and the school district decided to keep the fees in place.
The county’s moratorium took effect Oct. 10, and while it’s still a bit early to determine whether the stop spurred construction the way it was meant to, the data is pointing that way, DeLorenzo said.
October through December showed little change in the number of permits pulled for new homes, but construction is generally slow in the fourth quarter, DeLorenzo said. There were nine permits pulled for single-family homes in the county in September, just before the moratorium was passed, and the same number in October.
No more than 10 permits for houses have been pulled in the county during a single month since June 2007, DeLorenzo said. Palm Coast has issued 14 permits for single-family homes this month.
DeLorenzo thinks if Palm Coast were to reduce the impact fees it collects, the city would experience a similar increase in permits. He and other supporters of the moratorium speak of people who were dissuaded from building in Palm Coast because of the city’s impact fees, which total almost $13,000, including the $3,600 fee assessed by the school district.
But opponents warn of attracting too much growth without collecting enough money from impact fees to support higher infrastructure needs that come with a higher population.
“For many years, (Flagler County) has had a real-estate-growth-based economy that was widely dependent upon the retiree market as opposed to a more traditional jobs-based market,” McLaughlin said. “We will need to continue to balance the needed growth in the housing market with the need to attract other living-wage jobs at the same time.”
Toby Tobin, who publishes the real estate website GoToby.com, said he sees an increase in housing starts in Flagler County coming at a faster rate outside of Palm Coast.
“Real estate goes in cycles kind of independent to (moratoriums),” Tobin said. “A better way to judge (the impact) would be if you could measure how many people didn’t build because of the fees.”
Overall, Tobin said while he thinks some impact fees need to stay — such as utility-related fees — others, like parks, should be revisited.
DeLorenzo said the same. “Unfortunately, we’ve gone through this economic recession, and here in Flagler County, we have not been able to significantly diversify our economy,” he said. “We are still a real estate-based economy.”
Critics of DeLorenzo’s position say there’s little evidence that reducing or eliminating impact fees help the economy. A March 2012 study released by Economic Planning Systems Inc. explored whether adjustments to impact fees did any good in California. It concluded that impact fees played little role.
To DeLorenzo, a decrease in impact fees assessed by Palm Coast and Flagler schools would bring a wider impact.
“Housing construction equals jobs,” DeLorenzo said. “The housing sector has led the nation out of recession every time, and … that’s what’s going to pull us out of the recession this time.”