Council Approves Development Impact Fees on 2nd and Final Reading

The Murfreesboro City Council voted Thursday, June 15, 2023, on 2nd Reading, to implement a Fee Schedule with a newly adopted set of Development Impact Fees to help pay for infrastructure projects as the result of population growth and development in the City.

On May 25, 2023, City Council held a Public Hearing and voted to approve the proposed Fee Schedule on First Reading. City Council had previously adopted a Development Impact Fee Ordinance. The Fee Schedule sets the Development Impact Fees to be imposed on new development to offset the cost of public capital improvements in four major areas: roads, parks, public safety, and schools. Several other Middle Tennessee cities and counties have long had impact fees to help pay for new development.

“The City Council worked with consultant Tishcler Bise Inc. since 2019 to study and develop appropriate Impact Fees that help support infrastructure needs resulting from growth,” said Assistant City Manager Sam Huddleston. “The Impact Fees will help offset the costs associated with new development by providing a source of revenue in the City budget to expand or enhance infrastructure and services incurred as a result of new development.”

Tishcler Bise followed a prescribed methodology to determine the impact fee per residential unit and for non-residential projects a per 1,000 square feet impact was calculated. Impact Fee revenue can only be used for capital expenses that are incurred in response to growth and development—new or expanded schools, parks and recreation facilities, street or roadway, or new public safety facility or equipment or similar projects.

The Development Impact Fee becomes effective upon the start of the new Fiscal Year, July 1, 2023. Developers, homebuilders, and stakeholders will notice the Fee Schedule on building permits by land use. Permit applications for single family residential construction received by June 30, 2023, will be exempt from the fee as will projects with Site Plans approved before July 1, 2023.

Based on recent building activity, the Development Impact Fee is anticipated to generate approximately $9 million in revenue annually: For Roads & Streets $3.5 million; Parks & Recreation $1.75 million; Public Safety $1.75 million; Schools $1.75 million.

Council voted to adopt a graduated Fee Schedule for single family residential beginning on July 1, 2023, at $1.50 per square foot, increasing annually by .50 cents per square foot on July 1, 2024, and capping at $2.50 per square foot in 2025. The adopted schedule for Single-Family Residential, Multi-Family Residential, Retail-Commercial, Office, Public Institutional, and Industrial, is provided below:

Notes:

• Single-family residential includes detached units, attached units (i.e., “townhouse”), and mobile home units.
• Single-family residential Impact Fees increase to $2.00/sq ft on July 1, 2024.
• Single-family residential Impact Fees increase to $2.50/sq ft on July 1, 2025
• Multi-family residential includes duplexes, condominiums, and apartment buildings with two or more units.

For more information on City of Murfreesboro Development Impact Fee, visit https://www.murfreesborotn.gov/2355/Planning-and-Zoning