The Home Builders Association of Utah has filed lawsuits in two different courts claiming that American Fork and South Ogden didn't follow standards established by the Utah Supreme Court regarding the establishment of impact and hookup fees on new houses.
L. Tasman Biesinger, executive vice president, said the cities were informed of the criteria for initiating impact and hookup fees and passed their ordinances anyway. He said the lawsuits are aimed to curb the fees and regulations enacted by local governments that he says are eliminating affordable housing.The lawsuits in 4th District and 2nd District courts, respectively, ask for a judgment declaring the fees invalid, unlawful and unenforceable. He said there are seven criteria that must be addressed before a community can impose hookup and impact fees and that those communities didn't meet the standards.
The group already has filed a lawsuit against Riverton seeking to overturn an ordinance that requires exterior material for houses built there be "limited to brick, concrete, glass, steel, aluminum, vinyl, tile, stone and stucco" and that says "at least 50 percent of the exterior wall material on the first floor of the dwelling must be brick, tile, stone and stucco."
Biesinger said regulations that do nothing to improve the safety or quality of a house are often invisible factors that can add thousands of dollars to the cost.
For every $1,000 increase in the cost of a new home, the buyer's annual income must increase an additional $300 to qualify for a mortgage. A $3,000 impact or hookup fee added to the price of a home will cost the buyer more than $10,000 when added to an average 30-year mortgage.
He said the cost of developing a lot has increased dramatically in recent years and much of that is attributed to impact fees, hookup fees, real estate exactions and other assessments by the community.
In 1949, a lot was about 11 percent of the $9,500 sale price of a median-priced home, but that increased to 22 percent of the current $126,500 median sale price. Biesinger said impact and hookup fees range from $1,500 to $6,500 in Utah.