In plain talk, a pyrrhic victory means: “We burned down the house, but at least we got rid of the cockroaches.” That might apply to builders and developers whose lawsuit caused the state Court of Appeals to overturn Union County’s impact fee on new homes. They might celebrate now, but the ruling could lead to greater authority for local governments to control development.
That might cost developers statewide much more than the $147,000 in fees Union collected between 2006 and the court decision in December. The money helped pay for school construction and other growth costs. “Ultimately, the state legislature is going to have to deal with how to pay the incremental cost of new development,” says David Owens, professor of public law and government at UNC Chapel Hill. “That’s a difficult political issue because the building industry doesn’t want the cost focused on it. But taxpayers — and there are a lot more of them than developers — don’t want it either.”
Union is the state’s fastest-growing county, but it’s not the only one struggling to keep growth from overwhelming infrastructure. In adjoining Cabarrus County, builders in August won a lower-court case striking down a fee of up to $8,000 per house. The county has appealed — to the same court that threw out Union’s fee. Wake, Durham and several other counties have similar fees.
Supporters insist that newcomers should pay directly for public costs they create — particularly schools. Developers bristle at that. “Growth pays for itself,” says Andy Munn, policy director of the Real Estate and Building Industry Coalition in Charlotte. “And local governments need to find ways to provide fire protection, police protection, schools and these other things for its citizens.” The coalition represents two dozen companies and six building-industry trade groups.
Union plans to appeal to the N.C. Supreme Court. Largely unnoticed, according to County Manager Al Greene, is that the appellate court also struck down most of the county’s other options for controlling growth, which is spilling over from Charlotte at a record pace. One let the county postpone a development for up to three years if a school were planned nearby — but without rejecting the project outright.
Without such negotiating tools, local governments might feel compelled to reject more projects. And pressure by local governments statewide for a law that allows them to pace their growth is likely to intensify. “The ruling raises the entire question of exactly what we can do to manage growth,” Greene says.