Supported by NAHB, Southern Arizona HBA Wins Impact Fee Decision

The Arizona Supreme Court, on Jan. 17, handed down a victory to the Southern Arizona Home Builders Association (SAHBA) in its case against the Town of Marana over its onerous impact fees.

The SAHBA, on behalf of its members, filed a lawsuit claiming the town’s impact fees were illegal since they only applied to future home owners and not current residents.

The Town of Marana acquired title to a wastewater reclamation facility (WRF) from Pima County in 2013. Previously, Pima County used the WRF to serve the Town of Marana. Because of new Arizona water quality standards and certain limitations of a secondary system at the WRF, updates were required. To fund the improvements, the town levied an impact fee on home development, passing the costs to future home owners. 

The Arizona Supreme Court ultimately found this cost shifting to be illegal. Arizona state law prohibits impact fees funding improvements to existing systems for existing users. The fees can only fund improvements necessary for new development. The town was trying to blur those lines and pass on the costs of the required WRF improvements to future home owners.

This case is a huge win for Arizona home builders. Impact fees are a necessary nuisance to development, and when they are imposed, it must be done in a fair manner. Irresponsible impact fees stymie development and raise costs for future home owners.

Read the Arizona Supreme Court opinion.