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Letter: How can Gainesville keep down housing costs in a free market?
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Families in Gainesville are looking at significant rent increases as apartment complexes exit a state tax credit program that kept lease costs below market rates. The increased rent affects lower-income families the most as more than 50 percent of all renters in Gainesville are considered “cost-burdened,” according to census figures, meaning they spend more than 30 percent of their income on housing. - photo by Scott Rogers

The Times reporter Joshua Silavent reported Nov. 20 in a front page story that Gainesville City Council members George Wangemann and Ruth Bruner would consider imposing an impact fee on new residential and commercial development to fund affordable housing. 

I have questions for Mr. Wangemann and Ms. Bruner: 

What goal would you like to achieve by creating an impact fee? 

How would you measure the results? 

How long will it take to meet your goals?

Would you be trying to bring more cheaply built housing to Gainesville? 

Would you like to bring more homes with smaller square footage to Gainesville? 

Would you like to bring more people to Gainesville who, with less outlay of money for housing, would be willing to work for lower wages, than those people working now? 

Would you like to enable employers in Gainesville to be able to pay workers less money, because these new workers’ rents are being subsidized by government? 

Let’s posit that the impact fee would be 3 percent of all new construction in Gainesville. In this example, $1,000,000 of development would generate $30,000. The city of Gainesville would have to access the fee, collect the fee, account for the fee, decide when and where to spend the fee, oversee and enforce the fair and correct expenditure of the collected fee by developers of the new “affordable housing.”

These costs to Gainesville (for its employees to administer these fees) would probably reduce the actual expenditure of the original fee by 40 percent. This would leave only $18,000 for the city’s encouragement of “affordable housing.” 

How much new development would go to Hall County, outside the boundaries of the Gainesville, rather than within the city limits because developers’ projects wouldn’t be able to compete as successfully in the real estate market if they have to pay additional fees?

Is it good for a municipality to try to affect the the free markets of real estate, manufacturing, labor, finance, retail and construction, among others? Even, inadvertently, by increasing fees?

Rick Frommer 


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