North Carolina Builders Win School Impact Fee Case
In a clear victory for the building industry, a Durham County trial court recently ruled in favor of several North Carolina builders, invalidating a school impact fee ordinance imposed upon new residential construction.
Granting the builders’ motion for summary judgment in their class action lawsuit, the court ruled on Jan. 25 that the Durham County ordinance was “unlawful, void and without legal effect” and that the county was permanently enjoined from enforcing and collecting fees under it.
However, on March 1, the North Carolina Court of Appeals ruled that the county can continue to collect the fees on residential construction until the legal wrangling has been resolved. The recent appeals court decision, nevertheless, hasn't lessened the sense that builders have won a key victory at a time when cash-strapped local jurisdictions are increasingly turning to new or higher impact fees as an extra source of municipal funding.
The trial court ordered Durham County to refund to the builders all of the fees that had been collected, plus 8% interest, and to provide an accounting of all persons who paid or might have paid the school impact fees.
This victory amounts to a potential annual savings of more than $5 million for Durham County home builders and home buyers.
For more information on this case, which is likely to reach the North Carolina Supreme Court, e-mail Nick Tennyson, executive director of the Home Builders Association of Durham and Orange Counties, or call him at 919-493-8899.
This case follows on the heels of a similar victory in Ocean Springs, Miss., last year, as builders continue to score growing success in defeating these measures.
NAHB is available to provide technical assistance, litigation strategies and funding to state and local associations to battle impact fees and seek out alternative infrastructure financing solutions. For staff assistance on impact fees, e-mail Mary Lynn Pickel, director of legal services at NAHB, or call her at 800-368-5242 x8485; or contact Keyvan Izadi, land use planner, x8469.