Committee explores deferred impact fees, city payment options and enforcement tools for workforce housing

Workforce Housing Committee members debated how impact fees should be handled for projects that need financial help to be feasible, including whether fees can be deferred past certificate of occupancy, whether the city can pay all or part of fees, and what contractual or lien‑based protections the city should require to guarantee delivery of workforce units.

Randy (builder) described the cash flow strain that impact fees create at project completion and proposed options such as allowing developers to pay fees after a percentage of units are rented or sold. He said, “At the completion of the project is when every developer is the most broke. Could we extend that to maybe after 20% of the project is rented or sold?”

Joe (City attorney) replied that under the current draft “impact fees are collected no later than the certificate of occupancy pursuant to ARS 9‑463” but agreed to research whether fees legally can be deferred beyond that point. He noted that any extended payment program would likely be contractual and could take the form of a no‑interest loan or reimbursement structure tied to performance.

Committee members asked staff to clarify the difference between standard infrastructure performance bonds and any separate financial assurances tied to workforce housing incentives. Chelsea (Community Development staff) said the proposed assurances would be “independent, and it relates specifically to the waivers for workforce housing,” intended to prevent a situation where incentives are granted but the workforce units are not delivered.

Legal and financing questions also arose about enforcement. Committee members noted that, practically, a bank lien typically has priority and that a city lien or contractual remedy would be a secondary protection. One committee member recommended including language allowing liens or other recourse if a developer fails to deliver committed workforce units; another noted bonds and insurance can be difficult to collect on and that clear contractual obligations are important.

Ending: Staff will research the legal ability to defer impact fees past certificate of occupancy, the feasibility of payment programs (for example, deferral until a portion of units are rented/sold), and contractual mechanisms (liens, reimbursement agreements or no‑interest loans) to protect the city if workforce units are not delivered.