Parks & Recreation Facility Impact Fee Update Study
Impact Fees Overview
Municipalities assess impact fees on property developers to pay for infrastructure improvements that must be built due to new property development. New development brings new residents, which can put a strain on a municipality’s infrastructure and services. Impact fees are designed to offset the additional cost of maintaining these services.
In 1989, the Town of Wake Forest received local legislation to enact facility (also known as impact) fees for various purposes – Chapter 502 – SB 576. Development impact fees are one-time capital charges assessed to new development or new customers to recover a proportional share of the costs of capital facilities required to provide service to the new customers.
Specific methodology is required to compute the calculation and includes future growth projections along with planned capital resulting from growth (Capital Improvements Plan also known as CIP). Currently, we utilize Parks and Recreation and Fire impact fees.
Impact of Impact Fees
The following facilities were built or the land was purchased using impact fees:
- Flaherty Park Field #2 Improvements
- Devon Square land purchase (future skate park/pump park) – 8.34 acres
- 610 Brooks Street – 1.75 acres
- Park sidewalk connections
- Greenway connections
2024 Facility Impact Fee Update Study
As part of the 2024 Parks and Recreation Master Plan Update, a study was performed by Benesch to evaluate the Town’s current recreation impact fees and determine if any increases were necessary. The impact fees collected are used to address park and recreation capital needs created by growth. The recreation impact fee was enacted in 1997, then updated in 2003, and again in 2018.
During the September 3 Board of Commissioners Work Session, Benesch presented the 2024 Parks & Recreation Impact Fee Study recommended fees. Benesch then presented the study to the Planning Board during its September 4 meeting.
During the September 3 BOC Work Session, the Board reached consensus to maintain previously approved 70/80/90 percentage rate implementation of the Parks & Rec impact fees on an annual bases. If those percentage rates are formally approved, the updated impact fees will become effective January 1, 2025 at 70% of the calculated fee. The effective dates for phasing increases would be January 1, 2026 at 80% and January 1, 2027 at 90% of the calculated fee.
Public Hearing September 17
Staff’s recommendation is to approve the parks & recreation impact fee recommendations as presented by Benesch and requests the Board call a public hearing at the September 17 meeting (in accordance with NC General Statutes (G.S. 160A-364)) and receive comments from the public.
Staff will request the Board of Commissioners consider formal approval of the Parks & Recreation Impact Fee updates at the October 15 BOC meeting.
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Who's Listening
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Phone 919-435-9513 Email cdavis@wakeforestnc.gov -
Phone 919-435-9561 Email rwall@wakeforestnc.gov
The proposed impact fee increases will only further increase the costs of development and accelerate the housing affordability crisis. This is assuming housing developers can underwrite projects that make financial sense while being able to afford the underlying land. As we are all well aware, the growing housing demand fueled by the great migration has put a premium on land suitable for said developments, driving the acquisition and development costs up long before the developer gets to the point when these excessive fees are due and payable. The Town’s existing tax payers who wish to sell their property will be forced to take less than their counterparts in surrounding municipalities as the buyers leverage the high cost of doing business in Wake Forest into price reductions. Last, but certainly not least, it puts the burden of higher costs on future residents who don’t yet reside in the Town and their voices will not count in this decision.
These increases severely impact the ability to make new development pencil. Wake Forest clearly has a housing need, so this could exacerbate a housing shortage leading to more housing affordability issues. Most of the new communities going in include their own amenities. The fees proposed are far higher than any other jurisdiction in the area.