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Call for Impact Fees Falsely Assumes New Growth Doesn’t Pay For Itself

Posted on Jun 20, 2017 in:
  • Advocacy

Seattle Times columnist Jonathan Martin recently wrote a column advocating for adopting impact fees in Seattle, arguing that “growth doesn’t pay for growth.” That statement is simply not true. New development already generates other taxes and fees, such as the REET and sales taxes, which pay for transportation, infrastructure, and other priorities.

Our association is concerned about the effect of any added fee on housing costs, especially in light of our current housing affordability crisis. Housing affordability is a concern throughout our region and while the developer or builder initially pays the impact fee for new construction in jurisdictions that charge these fees, it is almost always added on to the sale price of the home. Any additional fees would likely be passed along to buyers or renters, further driving up home prices and rents at a time when housing costs are already skyrocketing. New homebuyers would be forced to pay for the fee with interest over the life of their mortgage.

The reality is that impact fees disproportionately affect new homebuyers, especially those at or below the median family income. The increasing use of impact fees and the costs that they add to development raises serious concerns about the effect of using impact fees to fund infrastructure will have on the affordability of housing.

Furthermore, impact fees are a one-time-only assessment and will never replace other fees/taxes in being a good, stable source of revenue. The city would be better served if a more stable type of user fee were used.

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