Will Albuquerque Abandon Impact Fees?

Westside Construction Presbyterian Hospital

The debate continues. Should the City of Albuquerque impose impact fees? How much?  Who should pay? The City of Albuquerque spelled out the reasons for impact fees back in 2004. Impact fees help fund critical major infrastructure in the building industry.  So the city government of Albuquerque requires builders of new commercial and residential buildings "pay impact fees that represent a fair, proportionate share of the cost of the parks, roads, drainage facilities and public safety facilities necessary to serve that new development."

The Albuquerque City Council imposed impact fees effective mid 2005, at the height of the local housing boom when builders could hardly build fast enough to meet the demand for new homes for people moving to the area from across the nation. The added fees were imposed gradually, to reach 100% imposition in 2007 for all homebuilders except green builders who would be exempt.

But the downturn came. Home builders, unhappy from the beginning with the imposition of the fees, have never stopped lobbying for the abolition or reduction of the fees.  After three years of real estate and economic downturn building sites are still largely quiet. Therefore, it was welcome news this week that the City Council voted to cut impact fees in half , extend the exemption for green building, and explore ways of making fees more equitable across the city. (Greater Albuquerque Association of Realtors)

A reduction or abolishment of impact fees, many think, could be one of the essential incentives the city needs for building activity to resume. Much restructuring has taken place during the past three years brought about by the extended pause in new home construction, the tax incentives, continuing low interest rates, falling home prices, and the mix of short sales and bank-owned properties. But all this seem insufficient for the jumpstart, so far. Who knows, the reduction and of  the impact fees may be just what's needed to give a added push to recovery of the housing market in the City of Albuquerque.

Greater Albuquerque Market Report

Second Quarter 2010

With respect to number of new listings and closed sales, the Greater Albuquerque, NM Second Quarter 2010, Housing Market Report reflects overall improvement over performance during the corresponding period in 2009. Like the turtle inching its way across the road at the Open Space Center, the market is gradually inching its way up again.

Not surprisingly, sale prices have fallen, but not as much as some might have anticipated. Average price changes showed only a 2.69% decline as eleven areas in Albuquerque and Rio Rancho reported not only increased sales but increased prices. North Albuquerque Acres, Albuquerque Acres West, Foothills North, Academy West, UNM, Uptown, Northeast Heights, Foothills South, Fairgrounds, Southeast Heights, Downtown, Valley Farms, Pajarito, Far North Valley, Northwest Heights, Rio Rancho South, Rio Rancho Southwest, Rio Rancho North and Bernalillo/Algodones all reported varying levels of sales and price increases.

New listings entering the market increased 8.01% and closed sales increased by 20.55%. Of significance is that the market did not shut sown or freeze. The Homebuyers Tax Credit empowered buyers to write contracts; and sellers faced the harsh realities of a changed market, adjusted prices.

(Market data is provided by the Southwest Multiple Listing Service of the Greater Albuquerque Association of REALTORS®. Analysis is by Eloise Gift, Managing Broker of Gift Realty NM, Albuquerque New Mexico. Data is deemed reliable but not guaranteed.)