City Commission divided on whether new portability of impact fee credits would lead to more affordable housing

STUART – The City Commission voted 3-2 Jan. 27 to permit landowners within the city limits to transfer impact fee credits to different properties as a way of potentially reducing the high cost of residential housing.

Both Mayor Mike Meier and Commissioner Merritt Matheson dissented on the vote in a continuation of their opposition to the proposed ordinance promoted by Commissioner Becky Bruner during the first reading held Jan. 13. Earlier that same day, the Commission had conducted an affordable housing workshop, and Commissioner Matheson complained that the proposal before the Board would not necessarily mean lower cost housing in Stuart.

“We’re trying to incentivize people to build more density downtown, and this is the opposite,” he said Jan. 13. “I don’t see this capability in any sort of way tied to the requirement for affordable housing. Other than incentivizing reverse density, it has the potential to make land costs cheaper to a developer, but there’s no tie in this language to the affordability of the end-user.”

During the latest hearing on the ordinance, Commissioner Matheson made a motion to provide some sort of insurance requiring developers to pass their potential impact fee savings onto future homebuyers.

“I’d like to make a motion to have staff bring back this item adding language that impact fee credits shall be tied to create affordable housing, should they be transferred to a new property,” he said.

Vice-Mayor Eula Clarke, who voted in favor of the ordinance during the earlier meeting, then requested the commissioner expound further on his motion.

“Under these specific circumstances here with the carrying forward of these old impact fees, what are you saying Mr. Matheson?” she asked.

“I’m saying that if a developer is going to transfer impact fees, that normally would have to stay with the land, those credits shall be used to create affordable housing as the city is defining it,” he explained. “That’s the intent of going down this route if we’re looking to make property more affordable to create affordable housing. So, nothing would change, except… if you’re transferring it to a new location, you’re creating affordable housing with those credits.”

“Relatively affordable housing,” the vice-mayor retorted under her breath, reflecting a common belief that not much could be considered affordable in South Florida’s regularly overheated real estate market.

When no second to Commissioner Matheson’s motion appeared forthcoming, Mayor Meier – who could have potentially passed the gavel and seconded it – then questioned Mr. Mortell about the consequences of restricting the transfer solely for the purpose of affordable housing construction. He primarily worried about the potential creation of controversial inclusionary zoning, which many cities around the nation use to force developers to set aside a portion of projects for affordable housing.

“In your opinion, if we were to ask for – or demand rather – affordable housing per our definition in order to be able to do impact fee transfer, is that contemplating inclusionary zoning?” he asked. “The commissioner’s motion, if it were to succeed, wouldn’t that then require us to create inclusionary zoning?”

The city attorney explained that such zoning could only potentially happen if the restricted ordinance were to pass first.

“No, because we can waive impact fees for affordable housing as it stands now,” he emphasized.

“It becomes your ordinance that you’d have to pass to have inclusionary zoning, and then if they provided affordable housing, you’d have to transfer the credits. It would require us to come back with a definition of affordable housing.”

City Manager David Dyess then told the Board that the latter would happen soon.

“Kevin [Freeman} and I have been talking about that, from the result of the [Affordable Housing] workshop,” he said. We don’t have the Stuart definition yet – we’ll be bringing that back in February.”

Although Mayor Meier agreed with Commissioner Matheson’s opposition, his failure to pass the gavel may have demonstrated his hesitancy on the affordable housing requirement or doubt in their ability to gain another vote. The mayor failed to respond to a Hometown News email requesting clarification on deadline.

“The commissioner’s motion dies for a lack of second,” Mayor Meier said.

Commissioner Becky Bruner immediately made a motion to approve the ordinance as written, which was seconded by Commissioner Kelli Glass Leighton, who had disputed Commissioner Matheson’s assessment Jan. 13 that a failure to link the transfer to affordable housing would encourage less density in the city’s urban core. Commissioner Clarke then asked the city attorney if the ordinance would set a precedent since the Board had heard so many questions about who would be the beneficiary of impact fee portability.

“It doesn’t create any precedence,” Mr. Mortell replied. “You’re allowing it to happen to anybody, so it doesn’t matter: It’s going to be applicable to all transfers. We’ve never done it before, but moving forward, it would be a new ordinance.”

“Okay so we’re treading new ground, but we’re going to go forward,” Vice-Mayor Clarke continued. “I just want to be clear, because I don’t want to hear other people come with other ideas afterwards.”

Mr. Dyess assured commissioners that they’d get to review each individual transfer request in the future.

“Each case has to bring a resolution before the Commission,” he said.

Only one member of the public addressed the Board on the issue, Flamingo Avenue homeowner Helen McBride, who urged its members to use restraint since she’d served on the committee tasked in the early 1980s to help draft the city’s first impact fees. She sided with Commissioner Matheson and referred to the city’s leased land referred to as the Triangle Property, along with the Taylor Property that used to have 20 units on it the city eventually required to be demolished. Ms. McBride claimed the Triangle developer, who built the luxury Azul apartment complex, got impact fee credits for the former buildings on the site that he’d had nothing to do with.

“The Triangle, I’ll pick on them,” she said. “If they had built one building in 1985, I could see transferring or doing what you want. The Taylor Property too, my God the railroad built those little cottages back in the day, but yet we’re going to give the Taylor Family credit to build 20 or 30 houses there? I’m not for that. You’re taking money away from our roads.”

Ms. McBride then directly addressed Commissioner Bruner and her fellow supporting commissioners.

“Commissioner Bruner, be very careful because you’re taking this money away from our schools and our roadways,” she exclaimed. “I know you made the motion, but you’ve got to protect us. I do know the impact fees are kind of high compared to what they were in the day but remember: The costs of the roads and our schools have gone way up.”

When Commissioner Matheson subsequently questioned Mr. Mortell on the fact the ordinance would permit the property owners mentioned by Ms. McBride and others to receive transferable impact fee credit for structures they’d never paid any impact fees on, the latter admitted it was standard practice.

“When the Triangle property was redeveloped by New Urban, they came in and calculated the square foot impact fees they would have been entitled to for the square footage of the commercial buildings on the property, and they received a credit on-site for those historic impact fees,” Mr. Mortell explained. “That’s not changing – the city’s always done that, and the county’s always done that.”

Right before Commissioner Kelli Glass-Leighton urged Mayor Meier to call the vote and subsequently end the discussion on the floor, Mr. Mortell admitted the city sometimes got the short end of the impact fee stick, citing figures from the city’s 2014 Impact Fee Update study.

“We determined that from 2008 until 2018, we generated about $1.5 million in impact fees each year, and the county spent a total of $32,000 on road impact fees in the City of Stuart during that 10-year period,” he claimed. “So, we generated about $15 million, and we got $32,000 back.”

The Commission then voted 3-2 to pass the impact fee transfer ordinance, with Mayor Meir and Commissioner Matheson dissenting.

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