Opinion: Taxing developers would be bad policy?

LOL,,,

 

Thanks, I messed up and deleted it by accident.

 

This is not the pit so I'll apply more respect for this forum than both of you. How's that low ground feel poopy dork?

 

LOL,,,

 

Developer buys a tract of land to where he can build 50 lots. Meanwhile whatever governing body hits developer with a (we will use 100k just for argument sake) 100k impact fee. Developer had planned on selling each lot for 30k (county water and septic). Now he sells each lot for 32k to recover his cost. Plain and simple and that is now it works. Builder now has to sell his house for 102k instead of 100k to recoup his cost or he puts in laminate instead of hardwoods. House buyer pays 102k.

You can argue the market this and the market that and that only works when there are drastic differences. The market does dictate prices for the most part, true, but not down to just a few thousand. If House X costs 150k on this side of the road and the same exact house costs 152k or even 155k on the other side of the road because the developer had to pay larger impact fees, the market does dictate that both houses must be sold for the same amount. If House X costs 150k on one side of the road and the same exact house costs 170k on the other side, then you have an issue.

 

What developer sells for only what he has to have to make a minimal profit though? If the 100K house is just as nice or nicer than the 102K, who in their right mind is going to buy the 102K house? If the houses on the other side of the road sell for 102K or 105K the 100K houses will soon be 101K or 104K so there is no money left on the table because that is the way business works. You cannot control your selling price, but you can control your costs and unless the impact fees are huge impacts they will be part of the costs because the developer will sell for as much as the market will bear for as long as it will bear because it may turn around and the 1 or 2K left on the table for each house may be the difference between survival and being an out of business developer. There are quite a few out of business developers too. They could not cover the costs they needed in the selling price and went belly up.

The developer who gets a better deal on the land sells that land cheaper than the developer next door who paid more for their land? No, they both charge as much as they can justify in the market. One makes a bigger profit than the other because they kept their costs down. If the second developer gets a better deal on the cost of materials/labor than the first they make more profit on the house itself. If the first can make the better deals all the way around they will sell for as close to the same price as possible to maintain their cash flow and to maximize their profits. The decider is often the lending institution and the appraiser who sets the fair market value of the house for the lender. It does not matter to 99% of the people whether the value is good because they cannot get a loan for more than the appraisal based on the comps.

 

Pretty good summation. Impact fees will be passed along to the consumer. No different than other costs like inspections, permits, etc. that are built into the cost of the home. The issue is this: developer, builder, or consumer...there is an undue impact on the level, type, and pace of development in Johnston County. This impact is not being kept up with in my opinion. You can raise taxes, but this unfairly address everyone to some degree versus those actually buying the home. Then the issue is why do the newcomers have to pay? This is similar to the Southern Wake Expressway being a toll road while the Northern is not. Doesn't matter. Horse left the barn. JoCo needs to be able to keep up with schools, landfills, etc. You have to start somewhere. Another alternative is to reduce the impact by reducing density, or the always popular moratorium.

 

You ought to write text books Wayne. You know more in two paragraphs than most people have learned in a lifetime.

 

You should see my newsletter ...

 

BTW, my older son just got back from a week long class at the Folk School in Brasstown.

 

Wayne, I'll let you know when we have the NCABANA show at the shop. December 3, I think

 

Cool, I will pass it along to him. He showed me pictures of some of the work on display at the school's blacksmith shop. Both of us were very impressed.

 

wayne, Jerry Darnell usually comes and demonstrates. He teaches blacksmithing at old williamsburg. He's a bada$$.

 

Jeremy had a picture of something the local groups and the instructors made for a charity sale. It was a series of medallions each made by a different group placed into a huge diamond shaped holder the instructors made. The thinnest piece of metal used was 1/8" sheet steel and everything was so detailed. Francis Whitaker passed away shortly after it was sold and when the buyer also passed Clay Spenser got together with some folks he described as "having more money than good sense" to buy the piece from the estate and donate it to the school. It is a wonder of metal artistry and I only saw the pictures.

 

Clay Spencer came up to the shop in 2007. We built 25 tire hammers in 3 days per his design.

 

So you are aware of his prior vocation? He holds tons of patents from that era too. The Folk School blacksmith shop has an office upstairs and each of the
balusters is made by a different artist. Clay's has a miniature replica of his tire hammer on it. It does not move that well but it does move.

Clay was the instructor for the week in case I did not say.

 

The JC County Commissioners passed the new development ordinances to banish PUD's within the County. With this change, I don't see the County being able to tack on additional costs to developers.