Bad Economy Slows Everything, Including Smart Growth and Impact Fees

After pulling on the reins to slow the building boom of the mid- to late 1990s, Cary NC leaders are wondering whether they yanked too hard.

Now, after touting the town as the smart-growth capital of the Triangle, a majority of the Town Council wants to take another look at the impact fees it installed under a promise to make development pay for itself.

Cary's water, sewer and transportation impact fees, which are charged to home builders, are about six times higher than Raleigh's, town figures show.

Much of the Triangle has begun to rebound from an economic slump that slowed construction, according to residential building permit figures tallied by Wake County. But in Cary, the building drought continues.

I would like to call attention to two underlying issues brought out by this article:

1. When the economy sours, people tend to ease up on environmental restrictions and related concerns. The bad economy over the past three years has deadened smart growth efforts across the country. Communities must always balance economic and environmental concerns--both in a slow and fast-growth economy.

2. The issue of how to pay for growth is a problem in a recession and a growth economy. Local governments are really struggling now with the issue of how to finance infrastructure and other public services. Impact fees are an established way to finance the incremental costs of growth in many states. Economic developers have never liked them, but they are important in many cases. We need to go to work on some new public finance innovations that deal with these concerns. Current answers are not providing enough help. One to consider is the tax-sharing agreement, which has helped nearby communities cooperate on financing growth.

I would urge balance by communities in dealing with these issues. They need to devise sustainable growth plans for the future and they need to adopt sensible strategies to finance growth. For most places at this moment, they need a dose of growth to jumpstart their economies and generate more revenues to finance public services.

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