Oswego May Reduce Fees for Newly Constructed Homes

Submitted by the Village of Oswego

The Oswego Village Board will consider reducing fees charged for newly constructed homes at the Regular Board Meeting on Tuesday, Nov. 3. Homes currently being built are typically charged fees of about $23,000. The proposal would reduce total fees to $19,000 and streamline the permit process in order to encourage continued growth in Oswego.

The Village began a joint study with Community Unit School District 308, Oswegoland Park District, Oswego Public Library District, and the Oswego Fire Protection District more than 14 months ago, recognizing that the current impact fee schedule was out of date and deterring developers from constructing new homes in Oswego. New home starts in 2015 are the lowest the Village has seen since 1995.

Currently, the Village of Oswego levies fees on all new homes built in order to support growth-related costs for local government units. The fees were last updated in 2005 and include an annual cost escalation of four percent. Homes currently under construction pay impact fees based on agreements made prior to 2005.

On October 29, 2015, study consultant Ehlers and Associates, Inc. presented their findings to representatives of the local government units. The study concluded that Oswego’s Development Impact Fees are among the highest in the area and should be adjusted based market conditions and actual capital needs.

Ehlers reviewed capital needs for each government unit as well as real costs and expected reasonable profit margins for developers. Based on their analysis, Ehlers recommends that the total fees paid per home do not exceed $19,000. This recommendation resulted in a Development Impact Fee of $15,500 to be distributed among the government units in percentages based on their growth related capital needs. The fee would then be reviewed against changes in the market and capital needs on a regular basis moving forward. The remaining $3,500 would be used for Village building permit fees.

The study findings support the fact that housing growth is necessary to support current infrastructure, future capital needs and to encourage continued economic development. In addition, growth in housing will expand the property and income tax base to support current capital and operational costs.

In addition to modifying fee amounts, Ehlers also recommended simplifying the fee schedules and collection procedures and updating the school and park land cash ordinance based on updated market appraisals.

“Our independent consultants used a holistic approach on this study and the result is a fee that will not only help fund the community’s capital needs, but is fair to future residents wanting to call Oswego home,” President Gail Johnson commented about the study.