Proposal to raise development fees in Atlanta

Signs of life and recovery in the market for real estate in Atlanta have led some local government officials to consider the possibility of raising development impact fees, according to the Atlanta Journal-Constitution.

Development impact fees are levied on real estate developers building homes, commercial properties and offices. The collected sums are then used by the city to help pay for parks, roads, fire stations and police facilities, as well as other infrastructural needs required to keep the city functioning. The legislation that has been proposed to the Atlanta City Council could increase this fee by thousands of dollars for the first time in nearly two decades.

"At some point as a city, we can't just say, 'Don't do it,'" City Councilwoman Joyce Sheperd told the news source. "This is really the city being fiscally responsible with what we do. We can't just sit on stuff and say the timing's bad. We've got to make sure as we build out, we're doing it in a smart way." She also added that the current fee structure is obsolete and costing the city substantial sums of money.

Despite the city's arguments for the proposed hike, real estate brokers, developers and builders are vehemently opposing the fee hikes. These critics and opponents have cited the fact that the real estate in Atlanta remains on shaky ground and that raising the cost of development could scare prospective developers away.

Opponents raise a good point when countering with the fact that the market in Atlanta remains murky. According to Nu Wire Investor, the Atlanta metro area suffered some of the biggest declines in real estate value, a total 17.4 percent drop over the last year. Real estate experts have attributed this decline to the large number of foreclosures, but expect the housing marketing in Atlanta to bounce back strongly.

The city plans on using the fees to offset the cost of adding new amenities to the city and ensuring that taxpayers aren't hurt by the high costs of development. However, there is always a concern that rising fees could drive business developments and construction projects away from Atlanta. This creates a delicate situation, for city officials must find a balance between paying for rising infrastructure costs and continuing to encourage developers into the rebounding real estate market.