The URL can be used to link to this page

Home My WebLink AboutMemo - Mail Packet - 10/21/2025 - Memorandum from Josh Birks re Regional Comparison of Upfront Development Fees for HousingSustainability Services Area 222 Laporte Avenue PO Box 580, Fort Collins, CO,80522 970-221-6324 CC: Diane Criswell, Senior Assistant City Attorney Caleb Weitz, Chief Financial Officer Patrick McMeeken, President of Land, Hartford Homes 1 MEMORANDUM Date: October 16, 2025 To: Mayor and Councilmembers Thru: Kelly DiMartino, City Manager Tyler Marr, Deputy City Manager Jacob Castillo, Chief Sustainability Officer, Sustainability Services From: Josh Birks, Deputy Director, Sustainability Services, jbirks@fcgov.com Subject: Regional Comparison of Upfront Development Fees for Housing Council has repeatedly asked for a regional comparison of upfront development fees (total construction fees, including impact fees, plus raw water costs). While it is difficult to get a fully accurate “apples to apples” comparison, Hartford Homes has provided staff with information that enabled a comparison for single-family detached construction only. BOTTOM LINE Based on the information shared by Hartford Homes, the total upfront development fees for a single-family detached unity built in the City and served water by Fort Collins Utilities is the least expensive in the region – under existing and proposed fees. The primary cause of increased upfront costs within the City served by other special districts appears to be Sewer Tap Fees, Water Tap Fees, and Raw Water costs. BACKGROUND Patrick McMeekin, President of Land, for Hartford Homes (a regional housing developer) shared the attached (See Attachment 1) comparison of upfront development fees for single-family detached housing in the region. Staff have not completely verified all data; however, they can confirm that the Capital Expansions Fees (CEFs) and Transportation Capital Expansion Fee Docusign Envelope ID: 1B18FFE4-D06B-4C07-B6B8-78223CD6DE09 2 (TCEF), which have been the subject of recent discussion by Council, are correct within the data set (with a few minor corrections reflected in the data below1). DISCUSSION The information provides some useful insight into how the proposed impact fees Council will consider, on October 21, 2025, effect upfront development fees and compare in the regional market. Current Situation Summarizing the information shared by Hartford Homes (see Table 1) indicates: ▪ The baseline upfront development fees (construction fee cost and raw water cost) to construct single-family detached units in Fort Collins when served water by Fort Collins Utilities is the least expensive in the region at $57,166 per unit. The next lowest cost location is in the City of Loveland where water is supplied by Loveland Utilities. ▪ The most expensive location to develop a single-family detached unit is in the City of Loveland when served by the Fort Collins Loveland Water and Sanitation District (FCLWSD). However, the cost to construct in the same district but within Fort Collins City limits is not significantly different, at 0.7 percent less. ▪ Raw water costs drive 61 percent of the variability in upfront development fee difference between Fort Collins and Timnath served by East Larimer County Water District (ELCO) and Boxelder Sanitation District (Boxelder). Storm Drainage Fees ($2,314 higher), City Use Tax ($1,714 higher) and CEFs and TCEF ($4,903 higher) account for most of the rest. ▪ The lowest total costs in Timnath, Windsor, and Johnstown are significantly higher compared to the City of Fort Collins baseline (see above). However, very little developable land remains in the Fort Collins Utilities water service area. Yet, this observation serves as an important baseline for evaluating the drivers of increased construction fee costs in City limits but outside the Fort Collins Utilities water service boundary. 1 Specifically, the data supplied by Hartford Homes excludes the General Government Capital Expansion Fee, which increases the Fort Collins fees by approximately $1,100. Docusign Envelope ID: 1B18FFE4-D06B-4C07-B6B8-78223CD6DE09 3 Table 1 – Comparison of Regional Construction Fees, 2025 Future Situation Staff updated the data shared by Hartford Homes to reflect the increase in fees proposed at the September 9, 2025 work session (see Table 2). Staff assumed a 2,201 square foot home to determine the fee to apply, which increased the total cost of CEFs and TCEF by $2,740. As a result: ▪ The baseline total upfront cost (construction fees + raw water) to construct single-family detached units in Fort Collins with water supplied by Fort Collins Utilities remains the least expensive in the region at $59,906 per unit. Even without assuming increases to fees by other Cities or Districts. ▪ Developing single-family housing in the Fort Collins Loveland Water and Sanitation District (FCLWSD) and the City of Fort Collins is now the most expensive place for upfront development fees. The cost is 1.7 percent higher than constructing in the same District but Loveland City limits. Utilities Entity / City Total Fees Raw Water Fees w/ Raw Water ELCO / Boxelder Fort Collins 56,118$ 40,074$ 96,192$ Timnath 46,430$ 25,000$ 71,430$ Average 51,274$ 32,537$ 83,811$ FCLWSD Fort Collins 71,427$ 42,000$ 113,427$ Timnath 61,739$ 42,000$ 103,739$ Windsor 69,800$ 42,000$ 111,800$ Loveland 72,175$ 42,000$ 114,175$ Average 68,785$ 42,000$ 110,785$ NWCWD / Boxelder Timnath 61,754$ 36,750$ 98,504$ City Utilities / Not Listed Fort Collins 46,085$ 11,081$ 57,166$ Windsor (Weld County)50,974$ 53,500$ 104,474$ Johnstown 59,018$ 39,375$ 98,393$ Loveland 49,710$ 13,183$ 62,893$ Average 51,447$ 29,285$ 80,732$ Docusign Envelope ID: 1B18FFE4-D06B-4C07-B6B8-78223CD6DE09 4 Table 2 –Regional Construction Fees, Fort Collins Proposed Fees CONCLUSIONS Based on the information provided by Hartford Homes comparing regional construction fees and raw water costs, staff concludes: ▪ Even with the increase to impact fees proposed on September 9, 2025, the proposed CEFs and TCEF remain regionally competitive, as evidenced by the City’s baseline total upfront development fees being the least expensive now and under the proposed fee structure. ▪ High Water tap, sewer tap, and raw water costs in other special districts are the primary drivers of high upfront development fees in the City of Fort Collins. Slightly higher use tax also contributes a small amount to the cost differential. ▪ Increases in upfront development fees impact a builder’s ability to finance and deliver housing; therefore, competitiveness in the region should not be overlooked. However, it’s important to understand the drivers of competitiveness. Utilities Entity / City Total Fees Raw Water Fees w/ Raw Water ELCO / Boxelder Fort Collins 58,858$ 40,074$ 98,932$ Timnath 46,430$ 25,000$ 71,430$ Average 52,644$ 32,537$ 85,181$ FCLWSD Fort Collins 74,167$ 42,000$ 116,167$ Timnath 61,739$ 42,000$ 103,739$ Windsor 69,800$ 42,000$ 111,800$ Loveland 72,175$ 42,000$ 114,175$ Average 69,470$ 42,000$ 111,470$ NWCWD / Boxelder Timnath 61,754$ 36,750$ 98,504$ City Utilities / Not Listed Fort Collins 48,825$ 11,081$ 59,906$ Windsor (Weld County)50,974$ 53,500$ 104,474$ Johnstown 59,018$ 39,375$ 98,393$ Loveland 49,710$ 13,183$ 62,893$ Average 52,132$ 29,285$ 81,417$ Docusign Envelope ID: 1B18FFE4-D06B-4C07-B6B8-78223CD6DE09 5 There are questions that remain unanswered by this quick analysis, including: ▪ How does the common use of metro districts in other Cities impact the amount/need for impact fees without necessarily reducing the cost of home ownership? ▪ How will the increased granularity in fee categories in the proposed system affect the upfront development fees for residential units of other types (e.g., attached and multi- family)? ▪ How will upfront development fees in other Cities and Districts change next year? Will those changes significantly alter the competitive position of Fort Collins fees? Docusign Envelope ID: 1B18FFE4-D06B-4C07-B6B8-78223CD6DE09