PBCA: Increase would stymie construction

SANDPOINT — A fee hike for new homes that is being proposed by the city would stymie construction here, according to contractors who criticize the plan.

The city and members of the Panhandle Building Contractors Association are considering a proposal that could increase by $5,000 the water and sewer hookup fees associated with building a house in Sandpoint.

Local builders, who pay the fee up front, said the jump is prohibitive in a slumped economy and would put the brakes on new development.

“I think the increases will really stop construction in the city,” Sean Gavin, owner of Mountainview Construction said. “It’s already pretty high now, and to impose these type of fees in this kind of economy, people are going to look for other places to build.”

The fees are meant to recover part or all of the cost associated with the additional use of the city’s water and sewer system, including future expansions or a new facility.

The fee scale is part of an engineering study paid by the city that is based on prospective growth, and its impact on the existing sewer and water systems. It calls for raising residential water hookups from $3,795  to $6,530 and sewer hookups from 4,355$ to $6,600.

The idea is to make new development pay its way instead of having existing property owners subsidize new construction, council member Carrie Logan said.

The city has the option of raising fees according to a maximum fee schedule that calls for the $5,000 increase. The city could also adopt gradual hikes, or none at all.

Logan said the city will move slowly on any fee increases, and will discuss the options further with builders.

“It will be a really thoughtful process,” she said.

Justin Schuck, who weighs in as both a council member and builder for Idagon Homes, said new construction fees are some of the biggest costs home builders face.

Hiking the fees, which builders pass onto home buyers, undermine the city’s push for affordable housing, he said.

For the 10 homes he built last year averaging 1,475 square feet, Schuck said he paid between $14,000 to $17,500 in fees to the city.

Adding $5,000 to the cost is an additional burden for the contractor, who pays the city fees up front, as well as the home buyer seeking an affordable product.

“I’m trying to build fairly inexpensive homes,” he said. “It’s a hard time to build now, as it is.”

 Scott Schriber of Selle Valley Construction said the fees paid to the city already make Sandpoint the top vendor for contractors.

“They are forcing us as builders to build more expensive homes to make back margin,” Schriber said.

The builders association and council will meet again March 16 at 5:30 p.m. at City Hall to hammer out an agreement on future increases.

“I don’t think it has to be either, or,” Logan said. “I think there has to be something in the middle.”

That could mean agreeing to a rate structure, as well as a payment plan for builders.

“Everything is on the table right now,” Schuck said.

Nailing more fees onto a construction project might not be in the city’s best interest, he said.

“I don’t think that’s the best way to go about it,” he said.