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what source of funds will be used to pay the affordable housing <br />unit's corresponding impact fees, and how such a subsidization <br />program will operate. It should be noted that a government which <br />elects to conduct a subsidy program will encounter additional costs <br />beyond those associated with paying the affordable housing unit's <br />impacts. The subsidy program will also require funds to administer <br />the program, along with other funds to monitor the affordable <br />housing unit or its residents for compliance with any subsidy <br />program imposed requirements. <br />Examples of two subsidy programs are the City of Orlando's impact <br />fee grant program and Indian River County's Local Housing <br />Assistance Program. The City of Orlando established a line item <br />fund in its annual budget to fund the payment of impact fees for <br />affordable housing. Indian River County's Assistance Program uses <br />state supplied funds to serve as the source of funds for the <br />payment of impact fees for affordable housing. By paying the <br />affordable housing unit's corresponding impact fees, both the City <br />of Orlando and Indian River County recognize that each affordable <br />housing unit will still create facility demand which must be <br />funded. The Orlando subsidy program has been in operation since <br />early 1993; however, it has not been utilized to a large extent at <br />this time. Indian River County's subsidy program has not yet <br />commenced at this time; however, from the extent of interest, it <br />appears that the County program may be quite successful. <br />As noted, using either one of the two impact fee alternatives to <br />provide impact fee relief for affordable housing units does not <br />eliminate the facility demand and associated facility expansion <br />costs created by affordable housing units. However, selecting the <br />subsidy program alternative allows a local government,to publicly <br />recognize and point out to the community that impact fees for <br />development are needed and these fees must be Said, regardless of <br />who pays the impact fees. <br />• Summary <br />In order to meet the demand created by growth, governments must <br />expand their facilities, and this expansion must be funded in some <br />manner. One alternative of funding facility expansion'is through <br />impact fees. By collecting impact fees, governments create a <br />designated funding source for the necessary capital improvements <br />while ensuring the existing community that new growth is paying the <br />cost of growth necessitated facility expansions. <br />These impact fees, however, do affect the price of housing, and <br />their effect on affordable housing, in particular, can be <br />significant. Because, Indian River County is implementing an <br />assistance program which provides for an impact fee subsidy to for <br />affordable housing, any additional action relating to impact fees <br />would be premature and unnecessary at this time. It is staff's <br />position that the County's impact fee subsidy effort is the most <br />appropriate step the for the County at this time. Therefore, staff <br />recommends that the Affordable Housing Advisory Committee make no <br />formal recommendations to change the county's impact fee structure <br />at this time. <br />RECOMMENDATION: <br />Staff recommends that the Affordable Housing Advisory Committee <br />recognize that Indian River County is implementing an impact fee <br />subsidy program and determine that no further action is required by <br />Indian River County at this time. <br />23 <br />MAY 189 1995 <br />BOOK 95 PAGE :39 <br />