While El Paso grows, who pays for the cost of growth?

It’s no secret that El Paso is a growing city in Texas. But, for a city to grow, land development must take place. This might mean new homes, businesses and neighborhoods are being built where there once was nothing but undeveloped land.

However, to build these new structures, you need water. Water lines and waste areas must be planned and put in place. Electricity is also a necessity for new development. There are costs involved with this part of the land development also.

The El Paso Water Utilities has a plan already drawn up for the expansion of a water treatment plant that should be able to handle growth for five years in the northeast and eastside of El Paso. A proposal to implement an impact fee to cover these costs has been initiated, which according to the EPWU can offset the costs without raising rates for existing customers.

Opposition to the impact fee, as expected, is coming from those who will be affected by it: the Capital Improvements Advisory Committee, developers and homebuilders. This means they would have to pay an impact fee for every new home built in the area.

According to the vice-president of the El Paso Association of Builders, this may cause builders to buy land and build in other locations outside the city limits. He also alleges that the costs will be pushed down to the homebuyers making it harder for Texans to qualify for mortgages.

Implementation of this impact fee may end up being a negotiation between real estate brokers and the homebuilders. Homebuilders may chose to tack on the cost of the impact fee to the price of a new structure or negotiate with the borrower’s real estate broker to add it to the purchasing fees.

Source:El Paso Inc., “Impact fees spur debate over who should pay for new growth” Alberto Tomas Halpern, Feb. 28, 2014