Impact Fees, Developers, and Politics


El Paso Water and the City of El Paso are discussing potential changes to impact fees, which homebuilders pay for the extension of service lines to new housing developments. El Paso water says these fees have remained unchanged since 2009, despite rising construction costs.

Impact fees are charged to builders when they request a new water meter for a new development project in West, East and Northeast El Paso, considered “the new areas.” State statute requires a recalculation of these fees every five years. This year, El Paso Water is proposing an increase as they say this will lower the costs on current ratepayers.

Arturo Duran, El Paso Water Utilities Chief Financial Officer, told ABC7 ratepayers are currently helping recover the costs needed for infrastructure in the new areas, “The more we collect on impact fees, the less the utility has to borrow to finance those projects,” he says.

El Paso Water provided the proposed impact fees to ABC-7, “This is for a typical three quarter inch meter, which is a majority of our residential customers and businesses use,” explained Duran. Current fees for water and wastewater in the Northeast are at $1,469 and could rise to $5,684, if approved. In West El Paso, fees are at $1,586 and could go up to $3257. The east side of El Paso would see the most significant increase, going from $1,617 to $17,981. Duran says this is due to the big increase in new projects, such as the expansion of the Bustamante plan and the advanced water purification facility.

Public input is crucial in the decision, Duran invites community members to participate in the last public meeting that will be held today at the Northeast Regional Command Center from 5:00 p.m. to 6:00 p.m. El Paso Water will provide feedback from the meetings and different service fee options to City Council on Tuesday, April 23.

If you live an established neighborhood, you are (and have been) subsidizing new development out on the fringes of the city. All the older neighborhoods, even some of the poorest neighborhoods in the United States, have been subsidizing that sticks and stucco sprawl on the west side, the east side, and northeast El Paso.

This is the third “every five year” calculation, and this year El Paso Water is seeking community input, God bless them. I imagine that EPWater is trying to raise public awareness to the way ratepayers are getting screwed by developers.

And it’s not just El Paso Water ratepayers that are getting screwed by all that sprawl. If you pay an electric bill you are also subsidizing all that development out there on the edges of the city. You’re paying for new electrical distribution lines even if your neighborhood has had electric lights for a hundred years.

But don’t expect a lot to happen. Developers have been making political donations to our elected officials for years, and politics is transactional. Even our favorite City Council Representatives are on the developers’ teat.

If you don’t have $2,500 to throw at someone’s campaign fund, you can always vote. You can complain.

That’s what I do.


  1. This is the issue of the hour. There will be a discussion of it in Council next week, so get out and make your opinion known. Martin Parades published an op-ed this morning on the topic, too, so let your city rep know your opinion on the matter. See the op-ed at:

    Also, the PSB is looking for applicants for an open board position. If you’re pissed off enough as I am, consider applying.

  2. It is indeed patently unfair for those of us who live in long established areas to be paying for new development elsewhere! So what if the cost of new construction goes up for home buyers? Meanwhile, can anyone explain how it is that our population has remained so stagnant for so long, yet the city has expanded so much in all directions?

    1. My theory, John, is that El Paso kids move out of their parents’ house and buy one of their own.

      When you go to a gathering in El Paso, the question isn’t “Where are you from?” It’s “What high school did you go to?”

      Or maybe they’re investment properties. The big investment funds, like Blackrock, are going heavy into residential real estate. That’s part of the reason that your property values are so high.

      Everybody has to live someplace, so let’s control housing. And water. The smart money is betting on the apocalypse.

      It’s not like they’re just betting on the most likely outcome. They’ll also make it happen.

      1. I believe this is it. Birth rates in El Paso have long been higher than the national average. They still are, although we are now below replacement, as is most of the country. So there are a lot of people in the 18-30 range who are moving out of their parents’ house for the first time. And a lot of people in the 25-35 range who are moving out of apartments they shared with roommates and into homes they share with spouses or apartments where they can live on their own.

        And you’re probably right that Blackrock and others are buying some as investment properties. But those guys are smart. They won’t buy properties if their analysis shows that there won’t be anyone to live in them.

        So I think it all comes down to new household formation. We’ll be able to coast on this for awhile. Birth rates didn’t fall below replacement nationally until around 2008. It was probably later in El Paso. But once we get to a point where the incoming generation of young adults is smaller than their parents’ generation, well, that worries me. There will be a limited number of winners in that zero-sum game, and I’m concerned that El Paso won’t be one of them.

  3. It seems to me that if the impact fees are on new development, then urban sprawl would be curbed.

    1. Yes, it would curb sprawl, with all of those incumbent benefits, because new houses would be slightly more expensive.

      And at least the final sale price would better reflect the real cost to the community. The externalities, the economists call it. The costs absorbed by the community that aren’t reflected in the sales transaction.

      It’s crazy that there’s any discussion about it. That’s it’s not just accepted as fact. It’s obvious.

      He who has eyes, let him see.

  4. Increased housing prices at a time when single family housing is already out of reach for more and more El Pasoans is recipe fore more stagnation and ultimately reducing the tax base.

    1. No entiendo como un impuesto, que representa el costo a la ciudania, dismunieria el valor de bienes raices. A mi se me hace que bajando los impuestors enmejora el valor.

  5. Council voted on Impact Fees yesterday and agreed 4-3 to adopt the fee structure proposed by EPWU. They get a another chance to vote on it at the 2nd reading of the ordinance on May 7th, so not out of the woods yet.

    As for increasing home prices (only in the affected East, West and NE sectors), I made the point to CC that the worst-case scenario per house was a 7% increase in the East sector, and <2% West and <3% NE, so a non-issue. See the Community First Coalition Facebook page for how I calculated the fee impact on home prices

    The BIG surprise was that the motion to adopt the 100% impact fee was made by Rep. Hernandez.

  6. In my job, I’m tangently associated with grants related to development, infrastructure and housing. I was investigating our eligibility pursue an affordable housing grant through HUD.

    It turns out El Paso county is not a priority area for affordable housing. It does not meet the federal government’s criteria for a locality in need of affordable housing, or in other words, by HUD standards, our housing is affordable. I found that interesting.

    It calls in to question the whole panic about affordable housing in our city / county. If by the government’s own data we have affordable housing in comparison to other city’s nationwide, why are the developers claiming we’re in a housing crisis?

  7. I checked out that link, but I’m afraid that it’s above my pay grade.

    You know that HOME, nee HACEP, is the biggest public housing authority in Texas. Maybe that tilts the scale.

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