Across Austin, Street Impact Fees are being collected but not yet spent

Though none of the money has been spent, two years of collecting Street Impact Fees has netted a potential $17 million in roadway capacity projects for Austin roads. 

Curious members of the Downtown Commission got an update on the city’s Street Impact Fee program from Transportation & Public Works supervising engineer Nathan Aubert at their most recent meeting. Though the Street Impact Fee officially went into effect when the ordinance was adopted in December 2020, collection didn’t begin until June 21, 2022.

The fees, which are part of an effort to make development pay for itself, help fund roadway capacity projects that are provoked by new construction. To date, the city has invoiced for more than $17 million in Street Impact Fees, collecting about $8.6 million so far.

Unsurprisingly, according to a table of fees broken down by City Council district, the highest invoiced amount is in District 9 (which includes the persistently crane-heavy downtown) at about $4 million. Districts 1, 2 and 3 have over $2 million invoiced. And District 6 has the least invoiced (by far) at $325,300. 

Also according to the chart, none of the money has been spent so far.

Fees are collected and spent in 12 service areas. According to state law, money must be spent in the same service area that it was collected in – and cannot be transferred out. 

“The goal is to keep them geographically close to where they were collected and for those developments,” Aubert said.

The fees are not assessed for all development in the city – only medium to large developments, which are defined as any project that generates 10 new peak-hour trips or more, a metric that intentionally does not include single-family homes.

“The goal was to steer clear of single-family projects,” Aubert said.

The fees are also dependent on what is on the site. Aubert explained that mid-rise projects don’t trigger fees unless they add about 23 units to a site, and high-rise projects need to add about 28 units to trigger the fees. For office developments, an increase of approximately 9,000 square feet triggers the fees. In addition, there are fee reductions for things like affordable housing development and improvements. 

In terms of what the money could potentially fund, the payments aren’t earmarked for specific projects but they must be used for projects in the Roadway Capacity Plan, which includes things like intersections and road signals in addition to the geographic limitations on spending.

“State law dictates that money is spent on capacity improvements,” Aubert said. “The idea is that the roadway capacity plan aligns with areas of need that we at (Transportation and Public Works) know new, bigger projects are needed to just address capacity issues that exist. The idea is that a developer is paying for the increased intensity in an area by paying towards those improvements.”

In terms of assessing and collecting the fees, Aubert said that their practice is to issue a formal calculation as early in the process as possible. State law dictates that the actual invoice is sent when a building permit is issued. In cases where a project isn’t completed as planned, the building permit needs to expire or be formally withdrawn before the city recalculates, or refunds, any fees.

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