The Osceola County Commission struggled a bit on passing new impact fees for the School District on Monday, having to decide which housing units should pay more based on student ratio.
On the winning end in this case appeared to be new short term rental properties, which will see a 38 percent reduction in fees that support schools, and vacation villas, which will forgo school impact fees altogether.
The exemption was based on the idea that students aren’t coming out of these homes, so
The Osceola County Commission passed new School District impact fees on Monday.
developers shouldn’t face fees that go toward creating new schools.
But on the losing end seem to be multi-family apartment complexes, which will see an average of an 87 percent increase, or $5,277 per unit, on new developments.
In other words, increased developer costs will trickle down to new apartment complexes, where most Osceola County students reside. Meanwhile, certain projects can apply for “vacation villas” status — a newly created category with no historical data, according to school district officials.
Developers on each new residential dwelling pay impact fees, and revenue is used to pay for the construction of new schools.
Osceola County currently has some of the highest impact fees in Central Florida, and is one of the only districts in the state to grant a complete exemption to vacation homes.
Approval from the County Commission was the final step in a 10-month planning and proposal process that included input from district officials, stakeholders and property developers.
The school district has historically examined these factors every three years. The district works with a consulting firm to determine what properties produce the most students, and therefore the ones should “pay their fair share” to build new schools in Osceola County, said Chief Financial Officer Sarah Graber.
Impact fees are the only source of income the county has for new school construction. The half-penny sales tax residents approved in November 2016 only covers renovations to existing schools, Graber said.
With five new Osceola County schools set to open in the next five years — including two elementary schools and a middle school in the Harmony area — the question was not whether impact fees would increase, it was by how much and for which properties.
A $25,000 study conducted by Tindale Oliver, the district’s consulting firm, concluded that short-term rentals produce few students, and should pay a reduced fee. The firm also concluded that the newly created “vacation villas” category will likely produce zero students, since the term is defined as a temporary dwelling of 90 days or less.
Generating additional revenue fell to the multi-family unit category, which also proved to be an increasingly popular dwelling for Osceola County students.
“The surprise is that there is much more generation of students from the multi-family section then we could have possibly anticipated, raising their rate about $5,000,” said Larry Walter, chair of the Growth Management Task Force, and one of several speakers to voice mixed emotions about the proposed impact fees Monday afternoon. “That’s a tremendous impact on that participator system.”
Hikes to apartment complex developers raised concerns about attracting new affordable housing projects in the future.
“With fees being so high, I just don’t see how we’re going to find a balance to get the affordable housing we know that Osceola County needs so desperately,” said Commissioner Viviana Janer. “That’s the one problem I’m having with this whole thing.”
Frank Kruppenbacher, attorney for the school district, said the district is still working to find a solution that generates money for new schools without limiting the county’s need for affordable housing.
“We are researching that issue and have discussed it. It’s really kind of a complex issue regarding the legality of it,” Kruppenbacher said. “We haven’t come to a clear answer on that at this time.”
The affordable housing vs. multi-family unit issue divided Commissioners. Fred Hawkins and Brandon Arrington sided with the school district.
“I understand the concern of development, and if development gets pushed to another community, that’s not always a bad thing for one of the fastest growing communities in the nation,” Arrington said. “Basically, it’s whether our school district has money to educate our kids or not. I just worry we’re trying to help the development community at the detriment of our kids.”
Commissioners Janer, Peggy Choudhry and Cheryl Grieb argued that more students would mean a greater need for apartment complexes and affordable housing. High fees, they countered, would make it difficult to attract developers.
“Because we want affordable housing, it’s a difficult balance between helping the students and making sure they have appropriate schooling, as well as meeting the housing they will go home to after school,” Choudhry said. “Both are needed.”
Commissioners batted around start dates, grace periods and proposed three separate motions before a final one was unanimously passed by the board.
The new impact fees will go into effect Aug. 1, with no prior grace period. Janer proposed pushing the start date from mid-June to August to allow developers with projects in the pipeline ample time to finish the permitting process before fees go up.
It was viewed as a compromise to an earlier motion that would have extended the grace period for developers, which Kruppenbacher argued was counter-productive.
“If you say let’s delay the fee going up, but let’s give everybody else the benefit of taking exemptions where they pay less, you’ve compounded on a system already reeling from a shortage of funds,” he said. “We can live with Aug. 1 provided the whole ordinance goes into effect Aug. 1.”