Homebuilder Lennar, despite a year when just about every company large and small struggled, posted profits of nearly $3.5 billion. That’s a 24% increase over the previous year.
There are many other examples like this; homebuilders both here and nationwide are prospering while many companies in other industries are just trying to survive. The construction industry has thrived despite the economic downturn. Here in Tucson, the housing market is, according to an article earlier this year in the Star, “sizzling.” Permits for new construction last year were actually up over 2019. Construction valuation in 2020 was at $860 million, up from $814 million the previous year.
As part of our efforts to inoculate ourselves from the full economic effect of the COVID pandemic, my colleagues and I passed a temporary reduction in impact fees that developers have to pay. However, reading about our local housing market and that these companies are making such high profits made me reconsider the break we were giving.
Cities and counties charge impact fees because with new development comes the need for new infrastructure. Without the fees, paying for infrastructure for new residents would come at the expense of neglecting the needs of existing residents. What we can do with the money is limited. The money can only be spent on new projects or on increasing capacity of existing parks, roads or public safety facilities.
The reduction has meant that we missed out on $293,000 in impact fees slated for parks. That could have paid for new dog parks, shade structures for basketball courts and lights for athletic fields. When it comes to roads, $335,000 in money went uncollected because of the break we gave the industry. That money could have paid for the final batch of improvements needed on East Broadway after the rebuild we did there.
I don’t begrudge the homebuilding industry for making money and employing Tucsonans, but continuing this break to them when they don’t seem to need it and so many sectors of our economy aren’t getting similar ones is unfair and it is impeding our ability to improve our city. That’s why I asked my colleagues at our meeting on Tuesday to reinstate our full impact fees. The measure passed unanimously and takes effect at the beginning of the next fiscal year, July 1st.
There will be some changes at Southwest Gas that many of you will notice over the next few months.
Southwest Gas is transforming their customer information system from the ground up on Monday, May 3, 2021 to provide a fantastic customer experience along with enhanced security. For important information on how this will impact you and the way your account will be serviced, please visit www.swgas.com/new4u. The site will provide regular updates and tools to help you navigate the new system.