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Back Local News Bill creates Affordable Housing SDC

Bill creates Affordable Housing SDC

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A BILL to create an Affordable Housing System Development Charge (AHSDC) has been introduced by Democratic Sens. Tom Ada and Rory Respicio.

“Bill 112-32 proposes to make the System Development Charge less burdensome for those who are building low-cost and affordable homes by assessing an SDC fee that is based on the total cost of construction or sale price and changing the timing of when the SDC fee has to be paid,” said Sen. Ada, who has oversight over the island’s utilities.

“Bill 112-32 is not income-based and does not eliminate the System Development Charge, as has been proposed by others,” he added.

At present, all new water and sewer connections to the Guam Waterworks Authority’s system, for residential dwellings, are assessed a one-time fee of $2,126 for water connections and $3,474 for sewer connections, if the area has sewer services. GWA assesses the fee to recover a portion of the costs incurred to accommodate new demands for water and sewer services that arise from the new development.

Bill 112-32 will make the AHSDC applicable to residential units that have a total value of up to $180,000 for land and construction, or in the case of ready-to-occupy housing developments, the sales price.

Additionally, it will change the current requirement that the SDC be paid at the time construction begins, to requiring payment at time of occupancy.

“This deferral of the SDC payment to the back end of the construction project is beneficial because maximum capital can be invested at the early stages of construction to bring the project to completion,” Sen. Respicio said.

Appreciate

Meanwhile, concerned citizens Rodney Webb, who earlier expressed his criticism of GWA’s SDC, issued another statement yesterday expressing his “appreciation” that the adverse impacts of the SDC are now under serious consideration by the Legislature.

In a letter emailed to Speaker Judith Won Pat, Webb argued that a flat or percentage SDC to all users of the water and wastewater system “is a fairer, more equitable and lesser economic cost to Guam than the difficulties of the SDC regime that we are currently struggling with.”

“If we take the higher SDC revenues of the past two years – $1.2 million – and divide it by the number of GWA customers – 40,800 – the cost is an average of $2.45 per customer per month (or 2.4 percent),” Webb stated.

“Notwithstanding earnest debate of these issues, I continue to believe that GWA’s SDCs are a significant burden for both individual homeowners, especially low-income families who would like to buy their first home, or build a home on their own land; and private sector companies who can build more efficiently, making the homes cheaper and more affordable,” Webb added.

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