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