As residential construction largely remains stagnant, some McHenry County municipalities are looking to reduce fees associated with building houses to attract developers.
McHenry County recently announced a plan to reduce several zoning fees after approving a 10 percent reduction in school impact fees last month.
“With home starts still anemic a decade after the collapse of the housing market, reducing impact fees is a meaningful step,” County Board Chairman Jack Franks said. “Reducing school impact fees is a big deal. Home construction used to drive McHenry County’s economy before the housing market crashed. … Everything has to be on the table when it comes to promoting economic growth, and this impact fee reduction will give our homebuilders a shot in the arm.”
Several municipalities have seen some success with reducing fees, including Richmond, Spring Grove and Harvard, developers and officials in the area said. Woodstock and Huntley are seeking to reduce fees to bring growth to the area.
Harvard in 2017 lowered its residential building fees, which includes permit, inspection and impact fees, which formerly went toward its schools, parks, library and the fire protection district.
The city has issued one building permit since its fee reduction, and at least one more developer is interested in the city, Harvard Mayor Mike Kelly said.
“There is an anticipation of additional permits being issued this summer as at least one builder has contacted the city in reviewing two different subdivisions for further development,” Kelly said. “The builder cited the reduction in fees as an incentive in their consideration of Harvard. They continue to do their due diligence to move forward with the development.”
The city had issued only two single-family homebuilding permits since 2013 before its fee reduction.
The Woodstock City Council recently considered a way to lower its fees to spur development, and council members largely were in favor of the plan. The city issued 18 building permits in both 2016 and 2017.
The city plans to work with School District 200 on the fee reduction proposal and noted that there is economic benefit to new development.
“This isn’t about cutting anyone’s budget,” Woodstock City Council member Mike Turner said. “It’s about saying, ‘If we get people to move here, the city gets the benefit, the schools get the benefit, and the economy gets the benefit.’ ”
Kim Meier, president of Richmond-based KLM Builders Inc., said a reduction in fees associated with housing development means not only more affordable houses but also a greater likelihood of development in municipalities where it’s cheaper to build.
KLM Builders built five homes in Woodstock in the past 18 months, and all of them were for “empty nesters,” which means the school district will get the benefit of additional property tax revenue without the effect of new students in schools, he said.
“The biggest positive is that [development] will generate more real estate tax whether they have children or not,” Meier said. “This isn’t just a one-time bonanza. … It’s revenue every year that someone lives in that home.”
Richmond and Spring Grove both have lowered fees over the years and have seen new growth, Meier said.
Huntley is in the process of determining how to reduce fees, and board members were in favor of the plan at a recent meeting.
“I never thought I’d say it, but we need residential development in the city right now,” Huntley Village Board member Harry Leopold said. “Whatever we can do to make it more attractive to developers without losing money. ... Well, we aren’t getting any right now.”