New homes might cost more as Fort Worth increases fees for road construction
New homes will soon cost even more in Fort Worth after the City Council voted Tuesday to increase the fees it charges builders for the roads that support new neighborhoods.
Beginning June 1, 2023, builders and taxpayers will share the cost of the new and expanded roads that are needed to accommodate growth in one of the nation’s fastest growing big cities. The 50% fee will increase 5% each year until it reaches 65%.
City staff had recommended 65% but builders and real estate agents feared the increases would further strain the city’s affordability crisis. They told council members that builders are likely to add the fee to the cost of a house.
The current collection rate for residential averages about 30%, and the fees can vary depending upon the location and type of development.
The median home price in Fort Worth was $341,000 in October, according to the Greater Fort Worth Association of Realtors. But increasing interest rates have put payments out of reach for many. Rates at nearly 7% have added more than $500 to the payment on a $341,000 home compared to a 30-year mortgage taken out a year ago.
Don Allen, a Fort Worth developer and first vice president of the Texas Association of Builders, told the council that a 65% fee would add $14,000 to $22,000 to the price of a house. Clint Vincent of Southlake-based Bloomfield Homes said a 65% fee would be a “gut punch” to the housing industry.
“We don’t want to do anything to keep people from building,” council member Gyna Bivens said. “We don’t have enough housing as it is, citywide, statewide, nationwide.”
City staff had previously proposed a fee of 80% for residential projects and 55% for non-residential projects, something that had the support from some residents in far north Fort Worth who wrote to the city in support of the plan. They urged the council to hold developers responsible for a substantial cost of road improvements.
Rapid growth has overwhelmed many roads in far north Fort Worth, frustrating residents who were drawn to the area’s affordable homes and top schools only to find even the shortest commutes involve a slow trek on a narrow and rutted pavement.
The Eagle Mountain-Saginaw school district, which is building a high school on Bonds Ranch Road, expects to add 9,000 students by 2031. Nearby Northwest, with 29,000 students, says its enrollment will grow by 10,000 by 2030.
Council member Elizabeth Beck stressed that even with the impact fees, the city was still covering some of the cost associated with new developments.
“It’s important for the public to understand when we talk about a rate, when we use 40% or 50%, that’s a percentage of the actual cost of improving the transportation needs for a particular development,” she said. “So that means when we the city set a rate at 50%, we are subsidizing corporations at 50%. We are telling our residents that we — you — in the form of your taxes or in your bond dollars are subsidizing builders to build.”
