Real Estate Agent · Houston, TX · Member since 2026 · 44 posts · 7 votes
Townhome and infill builders: if you're putting more units on a Houston lot, get the city's water and wastewater impact fees into your numbers before you make the offer.
1) Since July 1, 2026 the City of Houston charges $1,830.24 per service unit for wastewater and $2,553.11 per service unit for water, plus an admin fee. That's $4,383.35 per service unit combined.
2) The trigger is the Wastewater Capacity Reservation letter. The Permitting Center requires one for new development, adding to an existing development, or increasing occupancy. A teardown that becomes three townhomes is adding units.
3) How many service units your plan counts as comes from the city's Service Unit Equivalent table (UA005). Pull it for your exact product instead of guessing.
4) Timing matters on carry: paid water capacity is good for 2 years to begin construction, and paid wastewater capacity holds until it's used.
5) Wholesalers: a builder's max lot price drops by these fees for every service unit the plan adds. If your ARV math assumes three units, take the fees out of the spread before you price the contract.
Builders, what are you paying all-in per unit for permits and fees on infill right now? Drop the areas and lot size you're buying below.
Thank you for laying this out so clearly, Charos — this is exactly the kind of line item that quietly eats a deal when it isn't in the numbers before the offer. Even outside Houston, I see the same lesson: city fees and capacity charges have to be underwritten like any other cost, not discovered after you're under contract. Your point about the Capacity Reservation letter matters — the trigger isn't just new construction, it's any added unit, so a teardown-to-three-townhomes plan changes the math completely. I also like the reminder to pull the city's Service Unit Equivalent table for the exact product instead of guessing, and to factor the two-year window on paid water capacity into the timeline. For wholesalers, netting those fees out of the lot price before pricing the contract is the disciplined move. A great checklist for any infill buyer to run past their local permitting office.