City planners request increase to fees charged to developers for expanding infrastructure

LACONIA — The city is long overdue for an update to fees charged to property developers, and councilors will gather public input on proposed changes.

Impact fees are assessed on developments to help fund upgrades to city infrastructure and capital facilities needed to support such developments. The city’s current fee schedule was created in 2009, and adopted in 2011, and is low compared with other communities. 

“Over the past year, we’ve put out a study, and worked with a contractor to look at all of our facilities in the city, to interview department heads, gather all the data from previous [Capital Improvement Plans], previous building permits issued and also looked at growth trends in the region, the state and the country,” Assistant Planning Director Tyler Carmichael said during the council's regular meeting Monday night.

Currently, developers pay 50% of the current impact fee rate, depending on the type of construction. Current impact fees assessed upon a single-family home total $3,815 per dwelling unit, for a multifamily structure are $3,481 per dwelling unit, and for manufactured housing, $2,907 per unit. For commercial retail, it’s $1.96 per square foot, and $0.62 per square foot for industrial. 

City planners recommend putting impact fees at 50% of a newly proposed rate for each unit type. For example, the rate for single-family homes would be $19,307, and 50% of that would be roughly $9,654.

Ward 3 Councilor Eric Hoffman asked Planning Director Rob Mora if the new impact fee schedule would be prohibitively expensive for developers, and Mora said it would not. 

“We have a number of developers that come in every day, and we are the joke of the state when it comes to impact fees, because ours are so low,” Mora said.

“I do not think this will phase them.”

Impact fees are assessed based on historical use of municipal services. The fee schedule takes into account what level of services or capital facilities needs are required of each city department for a given development. There is no waiver process for impact fees. The only exemption would be for workforce housing units, up to a maximum of 20% of the development, if new language were adopted.

“I don’t expect it to impact the final price of any of these properties passed on to the consumer, I don’t expect it to decrease demand. And any dollar that we get out of impact fees is another dollar not coming out of the taxpayer,” Hoffman said. “I’m personally not going to lose a minute of sleep over a developer paying another extra percent on their development to pay for our infrastructure.”

Impact fees assessed, currently at 50%, would increase by 5% each year until they reach 100% by 2040, plus inflation. Once it reaches the maximum, they would increase only by the rate of inflation. If the new schedule were passed in December, for example, the first increase would occur in July 2026, rising to 55%.

“I’m on the planning board, and I support what they’re recommending,” Ward 1 Councilor Bruce Cheney said. “I would point out to anyone who asks about this, forget everything else: we’ve got 2,000 homes and a bunch of businesses and whatever else going in just [at the former State School property] that are going to make demands on this city that we have to pay for.

“I’m sure it looks expensive but increased police presence, increased cops, increased public works, patching roads, whatever, are costs that we’re asking everybody to pay, when in fact [Pillsbury Realty Development] ought to be.” 

Councilors set a public hearing on the matter for their meeting at 7 p.m. on Monday, Dec. 8, at City Hall downtown. 

“I just want to caution on what they’re proposing. What they’re proposing is to use these impact fees to create revenue to build infrastructure for housing that’s going to be coming in,” Ward 2 resident Gregg Hough said during a public comment period. “It’s kind of a self-fulfilling prophecy here. You don’t have the money for the infrastructure. The comment that is usually made with something like this is, ‘It’s not going on the taxpayer’s back, it’s going on the back of the builders.’ Well, where do you think the builders are going to put that responsibility? They’re going to dump it into the price.” 

“That will greatly help, I think, every department in the City of Laconia if we bring that up to a more current rate for new construction, and the impact to a builder is pretty incrementally small,” Planning Board Vice Chair Richard MacNeill said.