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2930 Orion Drive
Colorado Springs, CO 80906 USA
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Artificial Growth Stimulant Unwise

I urge you to consider carefully your approach to development application fees this month, and generally your approach to assessing new development for all its impacts – not just on the city general fund but directly on every local resident. These fees are a relatively small step, but we must start somewhere in revising our past practice of embracing growth without regard for the true net financial impact. I appreciate your desire not to reward any deception by city staff in the budgeting process, but the importance of this issue to our future transcends the petty backroom politics.

Current Practice Artificially Stimulates Growth

The impact of new development extends way beyond the city’s general fund. If one dispassionately and objectively adds up ALL the financial impacts of new subdivisions, fees charged don’t come close to covering them. This amounts to a subsidy from the city and the local residents, which serves to distort natural market forces. Regardless of what CSU publicly states, water is going to be THE ISSUE of the future. Our city cannot grow indefinitely without reaching a crisis point in water supply. It may not be in your lifetime, but surely you have no interest in generating a little extra commerce today at the expense of sustainability for future generations. For this reason alone, our goal should be to eliminate all growth subsidies, which only serve to accelerate us to the day of reckoning. The city attorney often enough tells us we can’t charge new developments for this or that. It would be imprudent to pass over a legal opportunity to remove one of the many market-distorting subsidies that exist.

Rampant Development is Not Serving Our Children

Only 46% of the people over 5 years of age living in Colorado in 2000 were living here five years earlier (Census 2000: Migration by Nativity for the Population 5 Years and Over for States). Very few of the children born here remain in town to graduate from high school and fewer return from college. New development is serving new in-migrants from other communities, who move into town to the tune of 50,000 per year. Nothing against in-migrants, but we do not need to subsidize new development to service a problem the homebuilding industry says local residents create by raising families. What we owe to our children is a community planned for sustainability.

Development Fees Are Not an Affordable Housing Issue

Asking new developments to cover 70% or even 100% of the city’s processing costs will not affect the young family pursuing the “American Dream” of buying their first house. The average new home is not priced for the first-time homebuyer. The American Dream for first-time homebuyers is served in older established neighborhoods where you find true starter-home prices. New development, which occurs mainly on our sprawling suburban perimeter, is asking us to “buy down” the cost of new $200,000+ homes by spreading the cost of infrastructure and services for new households among ALL taxpayers. If you vote to “keep the cost of housing down” by choosing to continue subsidizing new development, you are sending the bill to minimum-wage workers who can barely scrape together apartment rent, and to retirees on fixed incomes living in $100,000 houses in the central city. These people don’t have a choice about paying taxes (which cover the shortfall in city costs to process applications) and utility bills (which cover the cost of new facilities and more expensive water to serve a growing population). In effect, they are forced to subsidize $500,000 houses purchased by the upper middle-class in new subdivisions.

Fairness is Not An Issue

Don’t be distracted by the HBA’s insistence there must be improved service to raise the fees. New development has enjoyed discounted fees for years. Discontinuing that charity requires no quid pro quo. Besides, the city discriminates every day in determining where we allocate funds and where we don’t. I believe the city has spent $100,000 recently to help finance studies which benefited the development industry. We may wish to encourage participation in some areas by charging lower fees, while in other areas there may be no need to encourage participation. As an example, I don’t believe we cover all park & recreation costs with the sports participation fees – because we believe it benefits the community and we want to encourage participation by families that couldn’t afford higher fees. We probably don’t feel a community-wide need for more liquor stores, so there would be no need to charge artificially low fees for liquor licenses. We discriminate with every worthy cause we choose to support and every worthy cause we must deny. We do so as a reflection of our priorities and needs. If we look toward the future, and the inevitable difficulty of providing water and infrastructure for a growing community, there is nothing unfair about discontinuing artificial growth stimulants. That would be our intelligent priority.

Set the Stage for Successful Tax Issue

Undoubtedly you are frustrated in your desire to bring our infrastructure up to par. You wish you could get an historically stingy populace to ante up, as they must if we are ever to have an adequate transportation system. I suggest our only hope to approve the necessary tax increase is to first show local voters we’re willing to more fairly assess the source of the increasing burden on infrastructure. As long as development application fees do not even cover the city’s cost to review the applications, local voters are likely to feel they have to take a stand against growth subsidies wherever they have a choice.

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