Did you know that every new home or commercial structure in Lake and Sumter Counties is assessed a transportation impact fee? Upfront, I am not a fan of transportation impact fees for two reasons. First, I have never seen a two-bedroom, block home driving down the road. Second, most jurisdictions in America do not have impact fees. These communities rely on property, road, tag, and use taxes to fund the construction of roads—as it should be. Transportation impact fees have become another funding source in Florida to shift the burden from general revenues, which is a fancy way of getting more money for government.
The premise behind transportation impact fees is that when a structure is built it will create more instances of travel on the roads, which impacts the community. The projected impact the additional travel will have on the roadways is based on studies of various roads and highways with a complex mathematical extrapolation, which is applied to other areas. Lake and Sumter Counties hire consultants to do transportation impact fee studies and they essentially plug in the data to established computations. None of these studies are local or specific to the area, but that is a discussion for another day.
The problem is their established data points. For example, the most recent study in Sumter County has a huge number of data points from travel habits in the 1980s and 1990s, before the internet. Not only does this study fail to recognize the huge explosion of online businesses over the last decade, like Amazon, it also has no comprehension of the seismic shifts in business since the pandemic. Right now, every transportation study in the state of Florida is meaningless.
Unless you are paying transportation impact fees, most people in Lake and Sumter Counties have no idea about the cost of transportation impact fees. Plus, for commercial businesses most of these fees are priced by per-thousand square feet, which makes them seem lower. Here are some examples of current transportation impact fees in the area.
Transportation impact fees for a 2,500 square-foot home in North and Central Lake County are $1,180 compared to $2,666 in Sumter County. The North and Central Lake County area is the closest to Sumter County.
For an 8,000 square-foot family restaurant, transportation impact fees in North and Central Lake County are $27,024 while in Sumter County they are $84,024. Here is where it gets confusing—the advertised rate in Lake County is $3,378 while in Sumter County the advertised rate is $10,503. However, these rates are per-thousand square feet.
A 5,000 square-foot medical building in North and Central Lake County will cost the owner $15,855 in transportation impact fees while an owner in Sumter County will only pay $30,210.
Here is the bad news. In January, there was a motion made by a newly elected Sumter County Commissioner to increase transportation impact fees by 150 percent. Even before the proposed 150 percent increase, Sumter County’s transportation impact fees are much higher than Lake County’s.
Compounding the problem is the increased costs to construct new roads. According to information obtained from the City of Leesburg, the cost to construct one mile of a two-lane curbed road, which does not include underground utilities or the cost to purchase the land, is between $713,000 to $792,000, depending on the curvature of the road. Most four-lane roads cost more than $1 million per mile to construct.
Here are the reasons why transportation impact fees no longer work:
Taking the low estimate to build a small two-lane road and using Sumter County’s 150 percent proposed increase on impact fees, it would take 107 new homes just to pay for the blacktop—that does not include the cost to purchase the land or underground utilities. There are simply not enough homes being constructed, even in good times, to support road construction and maintenance.
The proliferation of online business is destroying local businesses. For jurisdictions to impose the total cost of road construction on local brick and mortar locations is unfair and giving another advantage to online merchants.
The calculation that is being used in these transportation impact fee studies is outdated and does not recognize the dramatic shift in online business and the dramatic reduction in travel to stores, banks, and medical offices. Completely new data points must be developed to not penalize local merchants.
Roads must be funded and the people and businesses using them the most should pay their fair share. Daily, Amazon, Federal Express, and United Parcel Service trucks are crisscrossing neighborhoods in the area as well as all kinds of ridesharing and food delivery service vehicles. There must be a development of a use tax for entities doing business outside of your community but benefiting from the roadways in your community.
Finally, there is an affordable housing crisis in America and our local community. In Lake County, once all the impact fees and building fees are imposed, most homeowners will pay close to $20,000 in extra government taxes before the first shovel of dirt is turned. The housing and construction industry simply cannot afford to pay more fees and expect to offer a viable, affordable house or apartment to our community’s essential workers.
Transportation impact fees are very complicated, and most of them are outdated with the huge shift to an online marketplace. Communities must explore other options for funding new roads and maintenance if they want to keep their local businesses relevant and in business. Transportation impact fee numbers simply do not add up anymore.
Don Magruder is the CEO of RoMac Building Supply and host of Around the House, which can be seen at aroundthehouse.tv.