WESTBROOK, Maine — The city wants to expand its sewer plant, but it doesn’t have enough money.
Like most other communities, the city has typically funded these kinds of infrastructure upgrades with property taxes or borrowing. But rising property values are burdening on residents, so city officials are considering a solution that the housing affordability crisis led the Maine Legislature to consider axing now: fees on new homes and other kinds of development.
“[It’s] a fairer way to allocate those costs over all of the development that’s going on in your community,” Jennie Franceschi, Westbrook’s code enforcement and planning director, said.
These “impact fees” are common across the country. The U.S. Supreme Court ruled last year that they must show a direct connection to the financial impact of a development. A large base of research on them has generally concluded that well-designed fees can be more efficient ways to pay for public infrastructure, but they vary widely in their implementation.
In Maine, they crop up mostly in Portland suburbs with strict housing rules. Kevin Bunker, principal of Portland-based Developers Collaborative, rattled off towns that have long been known for high fees, including Scarborough and Freeport.
Fees are generally accepted by developers who believe they should contribute to new pavement, stop lights and utility lines, he said. But he added that they often denote a failure of communities to plan for growth and set the right property tax rates for the services they provide.
“Municipalities shouldn’t be building up a warchest,” Bunker said.
Impact fees are governed by state law and are limited to being used for utilities, trash, public safety, roads, parks and schools. The revenue must be segregated from the rest of the community’s finances, and fees must be “reasonably related” to the development’s share of the improvements that are made.
That leaves a lot of room for interpretation. A bill from state Rep. Traci Gere, D-Kennebunkport, would convene a working group to study how impact fees are imposed and look into whether they should be standardized across Maine, while House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, has proposed a measure that would effectively end their use in most cases.
Discussions at the State House have hinged around an example of impact fees out of Gorham that the Maine Real Estate & Development Association called “overly broad.” In 2009, the town collected enough funds from residential development to fund the construction of a $245,000 field house at Little Falls recreation area.
The town has two other impact fees in effect that it outlines in a 14-page guide. That fee and a separate set going to the middle school charges per bedroom for new homes and apartments. There is a flat fee in effect for a part of the town covered by a water main expansion.
Recreational fees remain in place, and amount to right around $3,000 on a $600,000 single-family home, Tom Poirier, Gorham’s director of community development, said, noting that it has a relatively small effect on each developer.
The town’s field house was a necessity and the recreational fees are as well, Poirier said. With Gorham getting an average of 50 building permits a year, public fields used for soccer, lacrosse and other sports become more heavily used and require more maintenance.
The Maine Municipal Association, which advocates for cities and towns, is open to a study of impact fees, but it opposes getting rid of them. Poirier said doing that would hamper the community’s ability to plan for growth.
“I don’t think it would work like they think it would work,” he said of lawmakers.
