Even though the Mayor’s Housing Affordability and Livability (HALA) Committee rejected them, the Mayor’s office of planning is still moving forward with a very extensive process to implement impact fees in Seattle. As often happens with City process, one part of the City was tasked with a project (put together an impact fee proposal) and even though other events have intervened (the huge HALA process) that project is grinding ahead without consideration of any other elements of what the City has been doing. There is even a big timeline with the passage of an ordinance as the final step.

I was I little bit surprised when the City’s Brennon Staley contacted me to ask whether we could help figure out what other cities around the country do to impose impact fees. I’m not really motivated to help until we get our many other questions answered about Mandatory Inclusionary Zoning and a half a dozen other things the City is pursuing that will add real costs to housing production and thus to housing prices for consumers. Here’s the exchange below. I’ll update if and when we hear back.

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On Fri, Jan 8, 2016 at 9:33 AM, Staley, Brennon <Brennon.Staley@seattle.gov> wrote:

Roger, as part of the Impact Fee work, we are working with a consultant to put together a comparison of fees charged by various jurisdictions.  Overall, we are trying to quantify the cost of all fees that fund system improvements or relate to use of the ROW (in Seattle, those include Impact Fees, MHA, SEPA, System Development Capacity Charges, and Street Use Fees) as well as listing but not quantifying permit or service fees (such as permit fees, inspection fees, connection fees).

The consultant has a good sense of the types of fees that existing in Washington State and where to get information about them in other cities.  However, we are also looking at three out of state comparison cities (Portland, San Fran, and Denver).  Do you or the MBA have any contacts that might be able help us identify a complete list of the charges that developers would pay in these cities?  We want to make sure our comparison is complete. Let me know what you think.  Thanks.

On Fri, Jan 8, 2016 at 3:55 PM, Valdez, Roger <Roger@seattleforgrowth.org> wrote:Friday, January 08, 2016, 

Hello Brennon,

First, we think it is important to point out that, according to participants, the Mayor’s Housing Affordability and Livability (HALA) Committee considered and rejected impact fees as a tool the City should use to positively impact housing affordability (many agree they has a negative impact on affordability). We wonder why the Mayor is not setting work on impact fees aside while the proposals that were agreed upon are fully vetted and developed. If Council action is needed to suspend this work we urge the Mayor to pursue that first rather than pursue this research further. Even better, perhaps the City should try to coordinate all this work before moving forward in such an uneven way.

Is there anyone in your office or anywhere in the City actually mapping and coordinating how your work on impact fees is related to MIZ, the recently passed transportation levy, the HALA recommendations, and various other housing related studies and code changes in process? Has anyone even made an effort to provide written answers to the 10 questions we sent about MIZ last month? Has a meeting been set to discuss the feasibility issues with MIZ? 

Undoubtably, impact fees are legal under the Revised Code of Washington (RCW) 82.02.50 for “Public facilities” as defined in RCW 82.02.090 (i.e. public streets and roads, parks, open space, recreation facilities, school facilities, and fire protection facilities).While impact fees are legal, mandatory inclusionary zoning (MIZ), linkage taxes and such, we believe, are not. While we are opposed to the imposition of impact fees in Seattle, many agree that at least they are, in contrast to MIZ, legal, predictable, and that there is enough case law to hold cities accountable for how they are implemented.

Will the City follow the law and propose fees for public facilities as defined in 82.02.090, pursue a legally and economically questionable MIZ scheme, or both? Why? Does the work of the HALA committee not take precedence over other efforts? Is there any effort to understand how MIZ and impact fees would impact housing prices in the city over time? 

Second, thank for calling this “Development Cost Burden Research.” I appreciate that. Development of housing is indeed burdened with many, many costs and many of those costs originate from the City of Seattle and local governments through fees, permitting, Pavement Opening and Replacement Rule requirements, drainage, sewer capacity charges, and myriad of other imposed mandated costs.

Third, can you please tell me who the consultant is and give me his or her scope of work. We need transparency on what you’ve asked the consultant to do, how much they’re being paid, and who the consultant is and what other work they’ve done, where, and what other recommendations they’ve made and to what cities and jurisdictions. We need this immediately and I can’t see why we couldn’t just have that today or as soon as you read this e-mail. Thanks in advance for that. If it’s on line somewhere and I missed it, I apologize, but could you point me in the right direction?

We’d also like to see and be briefed on the work as it has gone so far. That is, you say you’re quantifying “the cost of all fees that fund system improvements or relate to use of the ROW.” We need to see what your first take is on that and see if it matches our experiencebefore this moves into the legislative sphere. Once your material moves forward, we think we’d have a hard time trying to true it up to our experience. My guess is that the estimate is pretty spot on from your end, we’d just like a chance to check it out and if there is disagreement, note it.

And why would your research only list but not quantify permit or service fees? These are an enormous cost burden, and I think it would present a less than fair picture of the private resources already going into supporting infrastructure needs all over the City. I have seen you include, for example, the Real Estate Excise Tax (REET) which largely funds the Cumulative Reserve Fund (CRF), a resource used broadly for infrastructure needs all over the city. I think it would be inexcusable to not count things like inspection fees, something entirely driven by the City’s needs but paid for by builders, and, ultimately by renters and buyers who will pay more for housing.

I certainly hope the consultant has a good sense of what’s happening in Washington State. But before I can use our resources to help you get information from other cities, we’d like answers to the critical baseline issues I’ve mentioned above that would have, potentially, a big impact right here in Seattle.

Thank you for your patience and working with us on this and thanks for planning to attend our next breakfast meeting next month.

Roger–