Madison City Council considering fee that could cost some homebuyers more than $10,000

The council is set to vote on the fee next month.

Posted: Feb 17, 2020 7:53 PM
Updated: Feb 17, 2020 9:33 PM

Homebuyers in Madison could soon be forced to pay more than $10,000 on a one-time fee if they chose to buy a new home.

Madison's city council is considering an impact fee.

The Huntsville Area Association of Realtors said Monday this impact fee is not currently in place anywhere in North Alabama. It's only in place in two beach counties in the state.

Homebuilders said permits in the city of Madison already cost six times as much as in the county and Huntsville, and they're worried how this could impact future homes being built in the area.

“I think it is shocking, but Madison city is a beautiful city," said Kimberly Varnagatas who lives in Limestone county.

One Limestone county woman who spent the day at a park in Madison said she hadn't heard of the possibility of an impact fee.

The Madison City Council said it currently plans for the one-time fee for a single family home would cost the buyer nearly $10,985 on top of the purchase price of a brand new home.

Whenever you buy a home you’ve already been pre-approved with a lender for how much you can spend on a home. then you have an additional fee on top of that, because it puts you out of your price range on how much you want to spend on a home," said Realtor Zelda Friedman.

She thinks the fee would prevent many home buyers from being able to afford the area. she said she thinks the city could end up losing money.

"It could affect people moving into the area, they won’t move into the area, it will affect commercial builders as well not being able to move into the area because if these people were moving into the area. You wild have increased property taxes and sales taxes," she said.

At a meeting held Monday afternoon for realtors and builders to discuss the possible fee, and the association of realtors said the city believes the fee could bring in about $55 million dollars in revenue.

The council said it plans to spend the money on roads, parks, the fire and police departments. Varnagatas told WAAY 31 if she moved, it would be to Madison. She thinks investing in the city is worth the extra money.

"Today, I'm enjoying this park with my granddaughter so that would be worth it. Some people you know the quality of this city I think they are just willing," Varnagatas said.

Others, who didn't want to go on camera said they think the fee is too high and would drive people away.

Friedman said she hopes the council doesn't go through with this plan and evaluates other options.

"Other alternatives, I would hope so but as far as knowing exactly what they are, I don’t, Friedman added.

The Huntsville Association of Realtors said this proposed impact fee would be the second highest in the country. The highest being in a town in Colorado. The city is expected to vote on the fee next month.

Wednesday, February 26 the city has a work session planned to discuss the fee. The first reading of the plan is expected March 9th. The vote right now is planned for March 23rd.

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