Do Austin development fees outpace Dallas fees nearly 10 times over?


Highlights

Paul Workman, a Texas House member, made an Austin-Dallas comparison reviewed by PolitiFact Texas.

Workman, R-Austin, said that Austin’s apartment development fees outpace Dallas’s fees by nearly 10 times.

City officials in the cities confirmed some of Workman’s cited figures, finding others flawed.

Still, it looks like Austin’s fees outrun Dallas’s fees by about 8 times.

PolitiFact Texas found this claim to be Mostly True.

An Austin Republican applauding Gov. Greg Abbott for trying to rein in regulations imposed by cities says municipal fees for building an apartment complex in Austin run nearly 10 times ahead of what’s charged in Dallas.

Readers asked us to check that.

State Rep. Paul Workman said in a June commentary in the Austin American-Statesman: “I have received a document from an apartment builder that demonstrates the difference in total development fees for building a project in Dallas versus building the same project in Austin. Total fees in Dallas: $120,081. Total fees in Austin: $1,026,852 — nearly 10-times higher for the same project! There is no way to argue that these fees are not contributing to the affordability crisis in Austin.”

To our inquiry, Brian Mitchell in Workman’s office emailed us an undated document showing fees attributed to the cities of Dallas and Austin, respectively, in each case toward construction of a four-story, 243,000-square-foot, 322-unit apartment project.

Next, John Burnham of Argyle Residential, which develops multifamily projects, told us he created the document in June 2016 or so. Burnham said by phone the Austin figures on the document relate to a 322-unit project, anticipated at Gonzales and Tillery streets in East Austin, and the Dallas figures were based on adjusting up city fees associated with plans to build a 260-unit project on the east side of Dallas.

Burnham said by email: “I was not attempting to display a summary of actual fees paid on a specific project. The fees that I outlined are accurate fees based on adopted ordinances and city codes.”

We ran the document past city officials in Austin and Dallas, hearing back that the comparison missed some fees while overstating and understating a few. Still, Austin’s fees far outpaced what Dallas confirmed as its charges.

By email, a Dallas city spokesman, Richard Hill, provided a document indicating total fee costs of $124,792.02, some $4,711 or 4 percent greater than the total fee costs estimated by Burnham.

A big added cost, according to the city, would come from at least $23,000 for a base permit for the complex’s garage, compared with $16,645 in Burnham’s document. The Dallas document also specifies $1,500 in fees for up to three engineering reviews of paving, grading and drainage, as well as $2,690.66 for a fire sprinkler review for the garage. The document cited by Workman did not specify those fees.

The Dallas document also suggests some lower costs than estimated by Burnham, such as $8,250 related to the city’s express review of the development plan compared with $12,000 estimated by Burnham.

A city of Austin spokeswoman, Sylvia Arzola, confirmed most of the fees listed in the Workman-cited document. But she said the garage fees would be about $6,000 lower if that facility didn’t have plumbing and wasn’t heated or air-conditioned.

Also, Arzola said, the Workman-cited document missed the city’s Commercial Building Plan Review fee, which is calculated based on a builder’s valuation of labor and materials. Working from the city’s web post of commercial review and permit fees, it looked to us like the fee on the project would start at $655.20 plus $1.30 for every $1,000 in labor-materials.

Arzola noted that a major cost shown for Austin and not Dallas — the parkland dedication fee — increased as of October 2016. So the up-to-date charge would be $346,230, nearly $43,000 greater than what Workman cited.

Another wide contrast: Both cities, the Workman-cited document says, charge a fee for domestic water and wastewater meters, but Austin’s fee of $380,000 greatly outpaces the listed Dallas fee of $7,380. (Hill’s document suggests the Dallas costs would be lower yet.)

By phone, Joseph Gonzales, a finance administrator for the Austin Water Utility, said the document’s Austin figures for the meter fees looked accurate. Asked to speak to Austin charging considerably more than Dallas for such fees, Gonzales said: “We’re trying to balance the impact of development between the development community and our ratepayers.”

Generally, Carl Wren, assistant director of Austin’s Development Services Department, told us some Austin fees reflect the greater complexity of the city’s municipal code. Dallas, for instance, doesn’t have the Save Our Springs limits put in place in the 1990s to protect waters flowing into Barton Springs.

David Stauch, president of Capital Project Management, an Austin construction company, said he’s helped build projects in both cities. Stauch said Austin’s plan review fees run considerably higher, “likely owing to the greater number of departmental reviews required and the greater level of scrutiny by each.”

Perhaps, Stauch said, it’s a trade-off for the quality of the improvements made compared with the natural environment, “but folks in Dallas like it just fine.”

“Increased fees might also be due to Austin’s low density,” Stauch said. The more spread out a city is, the more infrastructure needed to serve the residents.” A 2015 U.S. Census Bureau report based on 2013 population estimates pegs the density of Dallas at 3,684 residents per square mile, 29 percent greater than Austin’s density of 2,855 residents per square mile.

Brian Rodgers, an Austin civic activist and real estate investor, said it makes good sense for developers to pay for the impact of their development on public infrastructure. Rodgers noted that it’s been state law since 1989 that cities may recoup water, wastewater, roads and drainage costs related to extending city services.

“Austin doesn’t charge” developer fees “for roads or drainage,” Rodgers added.

Our ruling

Workman said it’s documented that city of Austin fees for building an apartment complex are nearly 10 times Dallas’s fees.

We found accurate multiple itemized entries in the document cited by Workman, though it also was missing fees and some figures weren’t right. On balance, it looks like city fees for building the project in Austin could exceed Big D’s fees by eight times or more.

We rate the claim Mostly True.



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