Remember What They Said about Impact Fees?

Remember back in April when the Chamber of Commerce, the Realtors, and the Northwest Arkansas Home Builders were telling Fayetteville voters that even the modest proposed road and street impact fees would kill economic growth? It is now abundantly clear that bad business decisions are the real problem for the developers, not the proposed impact fees that would have required them to pay their fair share for relieving traffic congestion caused by new development.

The poor decisions by developers to overbuild high-priced houses instead of affordable homes for middle-income families has led to a surplus of residential homes and lots in Northwest Arkansas, and it is taking a toll on local banks as evidenced by a 32.5 percent drop in second quarter earnings for First Federal Bancshares, due to reported delinquent construction loans totaling $30.8 million that drained profits.

Other banks are facing similar delinquencies by developers. The University of Arkansas indicated there were 2,700 unoccupied new homes for sale in Benton and Washington counties, while affordable housing that would sell in a New York minute is non-existent in Fayetteville. Northwest Arkansas building permit values have declined $81 million (20.5%) when compared to the same period in 2006, and they can't blame that on any new impact fees.

The Northwest Arkansas Home Builders Association, one of the most outspoken opponents of impact fees and local initiatives to assure affordable housing, is also in the tank as those chickens are coming home to roost. They formerly had seven executives on their payroll spreading their gospel, but they are now down to two employees after the resignations of executive director Jan Skopecek and membership director Lori Collier.