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Two metro Denver cities will increase various fees on development beginning Jan. 1 as stubborn inflation induces many municipalities to find ways to defray additional costs of capital construction projects.
Littleton City Council members voted to increase the city's impact fee for multifamily developments by 8% from $4,900 to $5,300 per unit. Nonresidential properties like hotels and offices also saw their development fees increase by 16% and 13%, respectively. Hotel development projects in Littleton will now be expected to pay impact fees of $3.94 per SF while offices pay an impact fee of $2.74 per SF.
“These fees help cities ensure that growth pays for its own infrastructure costs,” Littleton City Manager Jim Becklenberg said during the city council meeting on Tuesday.
Littleton Finance Manager Tiffany Hooten said the increases were primarily due to persistent inflation that has occurred since the pandemic began. The city didn't make adjustments to the fees in 2021 or 2022, Hooten said. The increases also represent the second phase of a three-year plan to update the city’s development fees.
Going forward, Hooten said city staff will bring forward an annual assessment of the city’s impact fees, which could prevent the city from passing significant fee increases in the future. If Littleton had incorporated the rate increases for both 2021 and 2022 in the bill, the total fee increase would have surpassed 11%, Hooten said.
During the Arvada City Council meeting on Monday, members voted to pass a resolution to increase fees for low-hazard industrial properties to a range between $87 per SF and $147 per SF, a climb of 13% from 2022. Fees for hospitals will rise by about 9.6% to $330 per SF, while multifamily permit fees will increase by roughly 11%.
Arvada also increased its fees for common construction inspections. Fees for temporary power inspections will increase to $56 from $51. Fees for temporary membrane structures, tents and canopies will also increase from $68 to $75 per installation and event.
A spokesperson for the city of Arvada told Bisnow in an emailed statement that the city “follows a standardized process to determine the rate of adjustment with the goal of covering the cost of providing permitting and inspection services.” The spokesperson also said they expect the increased fees to have “little to no net impact on fees and taxes collected for building projects.”
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