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Alderman calls for impact fees on new development

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Alderman Ann Rainey, 8th Ward, this week called for the City Council to discuss imposing impact fees on new development projects in Evanston.

Rainey suggested that impact fees would be a way to provide benefits throughout the city from the new projects. By contrast, she said, the public benefits the city now requires from planned developments tend to be focused on the area adjacent to the new building.

Ann Rainey.

Rainey’s proposal brought an immediate negative response from Alderman Judy Fiske, 1st Ward, who said any improvements derived from a new development should target the area immediately around the project.

“We’ve seen it in Chicago, where you have developers coming in, trying to figure out where the votes are on the City Council, and say ‘What can I do for you? What does your ward need?'”

Judy Fiske.

I would hate for us to go there,” Fiske said.

Fiske, of course, has seen numerous major development projects proposed in her ward, while far fewer have been proposed in Rainey’s ward.

Almost a decade ago, in May 2008, the City Council received a consultant’s report that suggested it could impose impact fees on new development — from skyscrapers to single-family homes.

The TischlerBise study focused on possible infrastructure improvements and suggested that the city could impose fees for water service, libraries and parks that could add $5,695 to the cost of building a new single-family home.

It also suggested that a separate excise tax for streets could be imposed that would add $5,300 to the cost of a 2,000 square foot home.

The consultant said the per-unit charges for multi-family developments would need to be somewhat less.

While aldermen on the Planning and Development Committee in 2008 responded generally favorably to the consultant’s report and asked staff to move forward with the idea, the subsequent collapse of the real estate market appears to have caused interest in the concept to fade away.

Another impact fee consulting firm, Duncan Associates, suggests on its impact fees website that the fees, because they’re determined by a pre-established formula, provide more predictability for developers than is offered by the individually-negotiated project-based public benefit process.

Impact fees typically are intended to relieve city-wide capital project burdens, rather than target the immediate area around the development site. And they are far more common in communities that have substantial undeveloped land and are experiencing rapid growth than they are in fully built out communities like Evanston.

In Evanston public benefits extracted from developers through the planned development process have tended to be focused around the development site, but the city zoning code explicitly authorizes ones that benefit “the City as a whole.”

The expansion two years ago of the city’s inclusionary housing ordinance to cover rental projects has created a shift in the political dynamic around high-rise development in the city, with some affordable housing advocates becoming at least conditional supporters of new projects who might not have backed them in the past.

It’s unclear whether adoption of an impact fee regime might also create a new pro-development constituency in the city, or whether it would persuade some aldermen concerned about rising tax rates needed to fund infrastructure projects to look more favorably on high-rise development.

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