Panama City reviews proposed transportation impact-fee ordinance; builders urge exemptions, phased start

City of Panama City staff on a March workshop laid out a draft transportation impact-fee ordinance and heard more than two hours of comments from builders, brokers and business groups who said the proposed fees would raise housing and commercial development costs.

The draft ordinance, developed with consultant Kimley‑Horn, would exempt single‑family homes built on existing platted lots that are 2,400 square feet or smaller (measured as heated and cooled space), exempt accessory dwelling units up to 1,200 square feet, adopt the state’s statutory treatment of affordable housing (citing the State Housing Initiatives Partnership rules), allow credits for previously existing nonresidential uses and municipal/public projects, and reserve the city’s plan to begin collecting fees no sooner than Oct. 1, 2025. Staff also proposed a 36‑month reconstruction credit so property owners rebuilding on an existing lot within three years would retain a fee credit for the previously existing dwelling.

Why it matters: The city says transportation impact fees shift the cost of new capacity — lanes, turn pockets, signals, sidewalks and bike facilities — from the general fund and existing taxpayers to new development that generates additional traffic. Builders counter that the proposed fee levels are large relative to current home prices in Panama City and could make smaller, “missing‑middle” homes and neighborhood commercial projects uneconomic.

City manager Jonathan Hayes and city staff walked attendees through red‑line edits to a 24‑page draft prepared after a…