The cost of building a home in southern New Castle County will be getting a little cheaper, starting today.
County Executive Tom Gordon's administration announced this month that it would be slashing the sewer fees that builders are required to pay for each single-family home, townhouse and apartment they construct south of the Chesapeake and Delaware Canal.
"Since the onset of the 2008 recession, at a time when we should have taken steps to encourage economic development, New Castle County actually increased the cost of doing business by 30 percent," said Gordon, who was not in office at that time. "We don't believe that's good economic policy, particularly when so many construction workers remain without employment."
The so-called capital recovery fees paid by developers are used to fund improvements in the county's sewer infrastructure. The amount of those fees varies throughout the county, with the highest costs charged to new construction south of the canal.
But starting Nov. 1, homebuilders in the area will begin to see some relief when those costs drop from $12,782 to $9,815 for single-family homes; from $10,652 to $8,179 for townhomes; and from $8,521 to $6,543 for apartments.
County Chief Administrative Officer David Grimaldi said the new schedule would bring the fees charged on new residential construction south of the canal back to pre-recession levels.
He said the county also would be reducing the annual fee hikes from 4.5 percent to 3 percent or the annual consumer price index, whichever is less.
Those changes would not affect fees charged in other parts of the county, or in municipalities within southern New Castle County.
Middletown, for instance, charges about $11,425 in sewer capital recovery fees for single-family homes and about $10,282 for apartments and townhouses. Those fees also increase 4.5 percent each year.
Residential real estate broker Bev Fawcett of Patterson Price in Middletown said the roughly 23-percent reduction in the county fees might seem relatively small in terms of dollars, but still could have a large impact for some homebuyers.
"If home builders pass the savings on, and I believe they will, it could mean the difference between a buyer being able to afford an option or upgrade," she said. "A person buying a $400,000 house might not be blown away, but others are only approved for a mortgage at a certain dollar amount, so it could be a big deal to them."
Fawcett said she would like to see the county hold the price of the county fees or enact even further reductions.
"At about $10,000, it's still a lot of money to add on to the price of a new home for anybody," she said. "Builders can't just pay that themselves. They have to put that in the sale price."