Building fees likely going up in Kane County

It's likely going to get more expensive to build, buy or remodel your home or business in Kane County. County officials will spend the next few weeks determining how much they can increase building permit fees without souring the local housing market.

The county hasn't raised building permit fees in a decade. As a result, the price tag for reviewing plans to make sure construction is safe and up to code is the cheapest in the area, by far, according to a study by Fiscal Choice Consulting for the county. The study shows the fees the county charges only cover about 30 percent of the actual cost of issuing a building permit. Using the number of permits issued in 2017 as a guide, the county needed to pull in about $1 million more through the fees to break even. That would mean fee increases of as much as 600 percent in some cases.

For example, the current average cost of a building permit for a single-family home of 3,500 square feet is $1,112. To cover the actual costs involved, the fee should be $6,621, according to the study. Likewise, the average fee for a 500-square-foot residential alteration is $330. The study says the fee should be $2,138.

Members of the county board's development committee expressed reluctance to raise fees that much all at once. Builders will likely transfer the cost of any fee increases to buyers, officials said. And both home sales and new construction bring new tax dollars to the county.

"We don't want to be known as having the highest fees, but we don't necessarily want to be the lowest," committee Chairman Kurt Kojzarek said. "We want to be in the middle and encourage growth in this area."

But county board member Phil Lewis also raised an issue of fairness. Not covering the costs of issuing building permits with the associated fees transfers the remaining burden onto the county's overall budget, he said. Lewis called for an "aggressive adjustment" to the building fees.

"With our fees as low as they are, we have decided to have the taxpayers of Kane County subsidize the construction in nonurban areas," Lewis said. "That's outrageous. They are not going to be happy, but I don't see any builder coming forward saying they are not getting fair value."

The committee asked staff members to return with a proposal for three versions of fee increases that would cover 100 percent, 75 percent and 50 percent of the actual costs. Discussion indicated officials are already thinking about fees that reflect 1 to 1.5 percent of the sale price of new construction. That would mean a fee of $3,000 to $4,000 for the average residential home built in the county.

There was also general agreement that it shouldn't be another 10 years before the fees increase again. Building an annual cost of living increase to the fees is one idea. Reviewing the fees every two or three years is another idea. The committee will discuss the fee increases again in September.