Aldermen consider new tax on development

Aldermen Tuesday received a consultant’s report suggesting the city could impose thousands of dollars in impact fees on each new housing unit built in Evanston.

The report from national impact fee consulting firm TischlerBise suggests the city could impose fees for water service, libraries and parks.

The fees could add $5,695 to the cost of building a new single family home in town. Per-unit fees for multi-unit buildings would be somewhat lower.

The same consulting firm has also prepared a report suggesting the city could impose an excise tax for streets of $2.65 per square foot of new construction. That would add $5,300 to the cost of a 2,000 square foot home.

The parks and library fees would apply only to residential construction. The water and street charges would apply to both residential and commercial projects.

“I see some real potential here,” Alderman Edmund Moran, 6th Ward. But he voiced concern about whether, given the weak state of the real estate market, it’s the right time to impose new fees.

In response TischlerBise consultant Julie Herlands said the city could consider initially imposing only 25 percent or 75 percent of the maximum legally permissible fees, and then review the fee level as economic conditions change.

She said economic studies indicate that infrastructure improvements funding through impact fees ultimately add to a city’s competitive advantage in attracting new development.

“I’d like to see discussion continue,” Moran said, “To see if we could adopt something that will not discourage investment and will work in an economically diverse community.”

Alderman Elizabeth Tisdahl, 7th Ward, apparently thinking of the potential to extract additional revenue for the city from Northwestern University, asked whether non-profits would have to pay the water and street fees and was told that they would.

At the request of Alderman Ann Rainey, 8th Ward, the proposed water hookup fee was placed on the agenda for the next meeting of the Administration and Public Works Committee on Monday, June 9.

Impact fees have traditionally been used in fast-growing outer-ring suburbs and are less common in older, more established communities.

A city staff memo noted that nearby communities including Morton Grove, Park Ridge, Skokie and Wilmette do not have impact fees, while others including Arlington Heights,Glenview, Highland Park, Lake Forest and Schaumburg do impose them.

Impact fees have also been used by school districts in some communities, but there was no discussion Tuesday of whether Evanston’s two school districts would be able to impose such fees, or, if they did, what the overall impact on development would be.

The city last year imposed a $4,000 per unit affordable housing fee on large new development projects just as the housing market was beginning to slow down. And since then the pace of new development projects in town has slowed dramatically.

Despite that, the consultant’s report projects that Evanston’s population will continue to grow from 78,274 estimated by the city planning department last year to 82,449 ten years from now.

The city planning staff’s population estimates have been higher than those provided by the U.S. Census bureau, which last estimated Evanston’s population at 75,543 in 2006.