In the next ten years, Lubbock will add more than 21,000 new homes, 7,000 new apartments and nearly 20 million square feet of new business space, according to a study done for the city.
That means more roads.
The city anticipates needing 139 road projects and 43 intersection improvements during that time, said the study by Kimley-Horn and Associates.
And the cost of road construction has nearly doubled in the last five years.
The ongoing debate of how to pay for those roads comes to a head this month with two public hearings – one to discuss “land use assumptions,” a governmental way of saying Lubbock’s future growth. The second is for impact fees themselves – one-time payments by developers to offset road costs.
Lubbock can charge up to 50 percent of a complicated formula for new construction but chose a few years ago to charge 25 percent.
Lubbock is pondering keeping impact fees at 25 percent but charging more money to cover the estimated cost of road construction. If approved, it will nearly double the fees.
For example, a new house in one part of Lubbock currently paying $1,764 in impact fees would pay $3,149 under the proposed agreement. And a new fast-food place with a drive-through in that same part of town would go from paying $54,000 to close to $92,000.
That’s why developer Jordan Wheatley wants to do away with impact fees and set up a city road bond committee.
Developer Thomas Payne – who sits on the Capital Improvement Advisory Committee (CIAC) which recommended the increase – argues impact fees are a fairer way of sharing the costs.
Where and when are the two public hearings?
July 8
Topic: Land use assumptions (issues related to growth)
Where: City council chambers
When: Right after executive session (regular session usually starts at 2 p.m.)
July 22
Topic: Impact fees
Where: City council chambers
When: Right after executive session (regular session usually starts at 2 p.m.)
David Glasheen, city councilman for District 3, is wary of the cost and said at a June 24 council meeting, “I want to make sure that Lubbock is a competitive, desirable place for people to come and live – buy a home, start a business and things like that.”
A large grocery store might have to pay up to $1 million impact fee, depending on location – nearly double the current cost, he said.
At the same meeting, City Engineer John Turpin took the opposite view – saying impact fees helped pay for three road projects with two more likely on the way. (See the chart below for his examples.)
“Impact fees reduce the burden on the general fund. They’re a mechanism for us to recover [costs] proportionate to the traffic that has been put out by new development,” Turpin said.
On the books since 2021
State law allows impact fees for water and wastewater, but Lubbock only uses them for new thoroughfares. Impact fees do not pay for roads inside a development, only major ones leading to it. They’ve been on the books locally since 2021.
“We have collected approximately $14 million across the city, and we have utilized a little over $5 million. We have close to $9 million left in funding,” Turpin said.
The CIAC recommends an update for inflation while leaving other aspects of impact fees unchanged.
If Lubbock charged the full amount allowed by state law, it would be half the cost of road projects in the next 10 years that are legally eligible for impact fees. That works out to $222 million. Lubbock currently offers a discount which cuts it in half again – bringing the maximum estimate to roughly $111 million.
Opponents would point out the city has needs that are not legally eligible for impact fees. Those projects would still depend on property taxes or other funding sources.
Vehicle miles – explaining a complicated formula
Officials split a map of Lubbock into eight service areas. State law says impact fees collected from an area must stay in that area.
Each area gets an estimate of how many new homes or businesses are coming in the next 10 years. Then traffic is estimated in a format called vehicle miles.
Those vehicle miles get split up between each new home, apartment or business. They can be assigned differently between, for example, a shopping center or a coffee shop.
Finally, there’s a cost estimate for road construction, divided up based on the vehicle miles for each home or business. That’s how the fees are assigned when a developer submits a plat. They are paid prior to the issuing of a building permit.
Clarification: This section was updated to indicate the fees are paid before the issuing of a building permit.
Comparing Lubbock to other Texas cities
The study assumes 2.2 percent growth each year. The highest growth is A, E and F which is West and Southwest Lubbock. See the map just below.
In addition to the study, Lubbock put together a comparison with nine other Texas cities, using Service Area F (the most expensive).
For a single-family home, if Lubbock compares itself only on roadway impact fees, it ranks fourth lowest now. Under the proposal it would rank sixth lowest.
Doing the same comparison, but remembering other cities charge for water and wastewater, Lubbock ranks second lowest now. Under the proposal, it would rank fourth.
Click here to see the 10-page comparison for yourself.
Lubbock also compared itself for the impact fees paid by businesses.
For example – again using Area F – a 150,000 square foot shopping center (something like Canyon West) would currently pay almost $671,000. Under the proposal, it would pay $1.2 million. Lubbock ranks fifth among the 10 Texas cities. Under the proposal, it would rank eighth lowest (third most expensive).
Payne called Amarillo an unfair comparison. Technically, Amarillo charges no impact fees. But other fees more than make up for it, Payne said.
“But if you go look at all of the costs associated with getting a building permit, that in fact are impact fees, their impact fee is far greater than Lubbock’s,” Payne said.
“Lubbock compares quite favorably [to the rest of Texas] even if this change is adopted,” Payne said.
Wheatley disagrees.
Roadway advisory committee
As home prices go up, Wheatley said, more people cannot afford a new home.
“The proposed rate would be $3,149 per house. And again, it doesn’t matter what size the house is. It’s just per house,” Wheatley said. (He was quoting numbers from service area F.)
The same for commercial property. Wheatley said he knows the owner of an athletic center, who decided to cancel an expansion of his current business.
That killed the deal … The owner was like, ‘I’m not gonna do this if I’m gonna have to be required to pay $200,000 for an impact fee’
jordan wheatley
“That killed the deal … The owner was like, ‘I’m not gonna do this if I’m gonna have to be required to pay $200,000 for an impact fee,’” Wheatley said.
Wheatley has been advocating for a road bond committee. Lubbock raised more than $300 million in two recent bond elections, dwarfing the $14 million from impact fees.
But Payne said the idea of more road bonds could backfire. People will feel like their property taxes are going up to pay for someone else’s area of town, he said.
That’s going to be viewed as unfair. … And then I don’t believe you’re going to get their vote. And if you can’t get their vote, you can’t pass them.
thomas payne
“That’s going to be viewed as unfair. … And then I don’t believe you’re going to get their vote. And if you can’t get their vote, you can’t pass them” Payne said.
Payne repeatedly emphasized impact fees were never meant to cover all the cost, just a portion. The idea is to make things more fair.
Impact fees can be used in addition to road bonds, he said. As just one example, impact fees can be pledged to pay back bonds.
Also, city officials have said impact fees can leverage state or federal money to finish a project that might otherwise run short of funding.
Payne said no one can build a new subdivision on dirt roads.
“If I cannot develop lots on a paved street, then I’m out of business because my customers, the builders, won’t buy lots from me. … The builders are out of business too, because they have no lots to build houses on,” Payne said.
Wheatley said, “I have chosen as a developer to go and look for places … where there’s already roads. There’s already water and sewer. It’s all there for the taking.”
And Wheatley defended his counterproposal, saying a roadway advisory committee can look 20 years into the future. Consultants can be hired hourly as needed. But impact fees need expensive studies every five years, he said.
Doing the math
The city put out a statement to advertise the two public hearings. It listed the cost in terms of dollars per vehicle mile. Payne thought it was a mistake because no one will know what that means.
“The average person’s not going to have a clue what this says,” he said
The city statement said, “The maximum amount of each proposed roadway impact fee per service unit will be as follows: … Service Area F: $2,233/vehicle-mile.”
But without the other numbers and the math, there’s no way to know the proposed impact fee for a house in area F is $3,149.
“The city is not helping themselves, not making things clear,” Payne said.
The following is based on a chart presented at the June 24 council meeting to show the actual impact fees for a new single-family house.
| Area | Current fee | Proposed fee | Increase |
|---|---|---|---|
| A | $1,270 | $2,417 | $1,147 |
| B | $973 | $1,299 | $326 |
| C | $1,225 | $2,460 | $1,235 |
| D | $925 | $1,809 | $884 |
| E | $1,501 | $2,436 | $935 |
| F | $1,764 | $3,149 | $1,384 |
| G | — | — | — |
| H | — | — | — |
(See the map up above to find areas A-H.)
Two areas of town, G and H in Central Lubbock, do not pay impact fees.
