Real Estate Agent · Houston, TX · Member since 2026 · 47 posts · 7 votes
If you build entry-level homes inside the City of Houston, check this before you price the lot.
1) The city's water and wastewater impact fees are $4,383.35 per service unit since July 1, 2026. A new single-family home can be exempt.
2) The exemption covers a home up to 3,000 sq ft and one service unit, sold at completion to a buyer who lives in it or leases it.
3) The cap is the Maximum Exempt Unit Cost: $330,985 for house and land together, effective November 1, 2026. Sell above it and the fees are owed to the city within 10 days of the sale.
4) Paperwork: WCR letter, HCAD documents, the exemption form, a builder sales price form or a notarized cost sheet, the signed contract, and the closing statement within 10 days of closing. Miss that deadline and the city can cut off exemption filings on your future projects.
5) Wholesalers: a house that sells just under $330,985 saves the builder about $4,383 per service unit compared with one that sells just over. That belongs in what a builder will pay for the lot.
Builders, are you designing to land under the cap, or just paying the fee? Drop the areas and lot size you're buying below.
If you build entry-level homes inside the City of Houston, check this before you price the lot.
1) The city's water and wastewater impact fees are $4,383.35 per service unit since July 1, 2026. A new single-family home can be exempt.
2) The exemption covers a home up to 3,000 sq ft and one service unit, sold at completion to a buyer who lives in it or leases it.
3) The cap is the Maximum Exempt Unit Cost: $330,985 for house and land together, effective November 1, 2026. Sell above it and the fees are owed to the city within 10 days of the sale.
4) Paperwork: WCR letter, HCAD documents, the exemption form, a builder sales price form or a notarized cost sheet, the signed contract, and the closing statement within 10 days of closing. Miss that deadline and the city can cut off exemption filings on your future projects.
5) Wholesalers: a house that sells just under $330,985 saves the builder about $4,383 per service unit compared with one that sells just over. That belongs in what a builder will pay for the lot.
Builders, are you designing to land under the cap, or just paying the fee? Drop the areas and lot size you're buying below.
@Charos Peña, this is helpful information for builders, especially when a small difference in the selling price could affect their costs. I'd think it makes sense to check the exemption requirements early rather than find out about additional fees when the project is almost finished.
In my experience with previous clients as a real estate attorney and broker in Maryland, I've seen how important it is to understand property requirements and potential costs before moving forward with a transaction. Even smaller expenses can affect the overall budget when they aren't planned for.
I appreciate you sharing this, @Charos Peña! It's a good reminder that knowing the local requirements is an important part of real estate development. Happy to stay connected!