City Council takes a serious look at development impact fees
Wed, 09/10/2014
by Gwen Davis
The Seattle City Council met on Sept. 10 to examine impact fees on land development. In West Seattle with a recent spate of major construction transforming the neighborhood, this issue has become more serious.
Are we charging fees that are different from other cities, a council member asked? Is it fair that we're picking on the developers? "We're actually making them join the party and not letting others subsidizing their cost," he stated.
There is evidence for the benefit of impact fees. The jurisdictions that are implementing impact fees, including 80 cities are doing well, according to the presenter, even though not all of the jurisdictions have the same impact fee policies. The highest impact fee in cities across the country are slated for schools, which has been a popular move. The fees are still very small and overall have not scared developers away, the presenter said. On the contrary, developers are allegedly friendly to jurisdictions with impact fees.
Fortunately, low-income housing projects are 80 percent exempt from impact fees, he said.
The meeting began with a briefing, followed by roughly 20 minutes of public comments.
"Let's begin with the definition," the presenter began. "It's paid by new development so if you're not developing you're not subject to this. We also have limitations -- we're not authorized to pay for street sweepers, resurfacing and potholes," he said. In addition, the fees can only be imposed if the money is to fix an existing project. There are four places where impact fee revenue would be used: transportation, parks and recreation, fire protection and schools.
What can people buy with these impact fees? They can be used to pay for system improvements. They cannot be used for project developments, nor the repair, replacement and renovation.
"I was in one of our neighborhoods," a council member said. "The alley had not been improved." Can the money be used for that alley, he asked? The answer was it depends on how the particular city defined their impact fee conditions.
Furthermore, the amount of fee has to be proportion to the amount of the impact. The law says that one cannot rely solely on impact fees. If a city had a total cost of $111 million, for example, it would be eligible for $88 million in impact fees.
Why would a city be interested in this? The growth fixes problems it creates so existing taxpayers don't pay to fix growth's problems. Also, it improves quality of life for the city and increases revenue.
If impact fees are not used, taxes would be raised and the public accommodations would be decreased.
Myths include: impact fees stop development, impact fees are paid by developers, they can solve any infrastructure problem and growth pays for itself through taxes, the presenter said. All of these reasons people bring up to slam impact fees are false.