Mayor Calls for Impact Fee Reform
Chris Ramirez - (505) 350-4833
Albuquerque — Mayor Richard J. Berry today called on the Albuquerque City Council to overhaul impact fees and introduce legislation that will comprehensively reform the current system. Impact fees are fees charged by the City to property owners to help fund major infrastructure in Albuquerque. So far, impact fees have paid for parks, trails and open space facilities, drainage facilities, traffic signals, public safety facilities, and roadway projects.
"The City Council and my Administration must work together to find a system that treats all areas of Albuquerque fairly, encourages investment in our community and removes the penalizing features of the current system," Mayor Berry said. "Moratoriums are not the long term solution to the problem, but I will support Councilor Trudy Jones' moratorium on impact fees in order to give ourselves time to craft meaningful changes to the current system."
Mayor Berry outlined several key principles he wants the reformed impact fee system to address:
- A system that treats similar land uses in a fair and predictable way and does not discriminate between different city regions unfairly. The current structure has been unduly burdensome on certain regions of Albuquerque. For example, a 5,000 square-foot development on the Westside will cost a builder up to $70,000, whereas the same sized building development on the Eastside will cost $1,000.
- A system that makes local development and local purchases affordable and desirable. Our current impact fee system has been unpredictable with the building community. Builders understand the need for impact fees; however, the current implementation of the system has been flawed by ambiguity and left too much to interpretation. When local business wants to invest capital in Albuquerque, we should be able to provide structure that is constant and reliable.
- A system that encourages investment throughout Albuquerque. The current impact fee system is unnecessarily complex with its 22 different service areas and has added layers of confusion. Essentially, Albuquerque has been broken up into 22 parts all with different formulas to calculate the impact fee.
- A system that charges fees for the true impact of projects. Recently when a small business owner attempted to open a fitness center in an existing Westside building, he was shocked to find out that the impact fee would be nearly $130,000. With the current moratorium the fee was still $64,911. The large fee for the Westside location has prompted the business owner to exclude the Westside from future expansion plans unless the system is reformed to make building on the Westside as affordable as building anywhere else in Albuquerque.
Current Fee Structure
Mayor Berry has been critical of the current impact fee structure stating that the system often discourages investment in businesses and residential and commercial real estate across the city. Mayor Berry also believes Albuquerque's current impact fee structure has unfairly and negatively impacted high-growth areas, such as the Westside and Southwest Mesa.
As city councilors begin the process of reform, Mayor Berry encourages the existing Impact Fee Committee and consultant to consider the systemic problems and provide recommendations to the Council. It will be important that the Berry Administration, the Impact Fee Committee, the consultant, and City Councilors continue to work together for the best possible outcome. The best outcome must be one where there is equity among all parts of the city and where there is predictability and fairness.