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Friday, September 11, 2009

Guest Blog: Taxpayers Being Fleeced in Albuquerque by NAHB

This is a guest blog by Greg Lennes, Las Cruces resident and retired Business Executive.

Taxpayers are being fleeced in Albuquerque. This time it's the National Association of Homebuilders (“NAHB”) seeking their own bailout in Albuquerque. The organization is running a national campaign to reduce or suspend impact fees that are vital to building infrastructure and for an orderly growth in cities.

So let me get this straight. Bad and unscrupulous lending and borrowing decisions were the culprits in the real estate market collapse. Now the NAHB is sending a speaker criss-crossing the country including my city -- Las Cruces -- telling local governments of the evils of impact fees. According to a number of authoritative studies like that of the Brookings Institution (see here), there is no evidence that cutting the impact fees results in any increase in residential or non-residential construction.

Dr. David Swenson, an Iowa State University economist unmistakably said that NAHB's housing and economic model is "a victim of flawed thinking. It's absolutely not possible for a community to grow itself into prosperity by building new homes. It's not the idea that 'if you build it, they will come.' It's actually the idea that if people come, you will build homes for them." The "build first" mentality will ruin the budget of a city. Click to read Mr. Swenson's excellent letter (pdf) on the subject.

The NAHB is throwing around all kinds of bogus data and statistics to convince municipalities and counties of the need to decrease impact fees for a quick-fix. As Mark Twain so aptly stated: "There are three kinds of lies: lies, damned lies and statistics." So if a city slashes impact fees for essential roads, sewers, water lines, etc., it is obvious taxes will have to go up. This will be a disaster for Albuquerque and taxpayers. The NAHB and its members have to remember the 1930's adage that "There ain't no such thing as a free lunch." Mayor Chavez and the Albuquerque City Council have made a big blunder.

A bill package originally proposed by Mayor Martin Chavez to reduce or waive impact fees for one year was narrowly passed by the Albuquerque City Council this past Wednesday. The vote was 5-4 with support from Councilors Ken Sanchez, Trudy Jones, Sally Mayer, Brad Winter and Don Harris. Opposed were Isaac Benton, Debbie O'Malley, Michael Cadigan and Rey Garduño. The legislation would cut impact fees in half for the next year for most projects, with a full waiver available for development that meets certain "green" requirements. Check out this piece by Marjorie Childress at NMI for background on this issue.

This is a guest blog by Greg Lennes. You can read his previous guest blogs here and here. If you'd like to submit a piece for consideration as a guest blog, contact me by clicking on the Email Me link at the upper left-hand corner of the page.

September 11, 2009 at 11:49 AM in Business, City of Albuquerque, Corporatism, Economy, Populism, Guest Blogger, Housing, Jobs, Land Issues, Las Cruces, Sprawl Development, Urban Issues | Permalink