Along with dealing what will likely be a death blow to microhousing, the City Council’s Planning, Land Use, and Sustainability (PLUS) Committee is considering the idea of “linkage fees;” yet another supply killing, raising intervention in the name of affordability. 

If you live in Seattle and pay attention to land-use and housing issues, you may feeling some déjà vu. Things seem to repeat themselves over and over again. This has played out in the realm of housing development recently; think back on the ways that the city and the council have squeezed down on housing supply in the past few years. Last year they did a good thing by up-zoning South Lake Union only to couple the code change with increased developer fees for density bonuses (the infamous incentive zoning fee). We know how effective that has been. They passed small-lot legislation this past summer limiting new construction of smaller, more efficient homes in single-family zones. They are on the brink of passing microhousing legislation that looks like a compromise at first blush, but based on preliminary analysis by builders an architects may stop all micro projects in their tracks due to financial infeasibility. Councilmember Sally Clark is trying to partially repeal the very same low-rise up-zone she helped push several years ago. Why? If I had to guess, it would be the same thing it always is: A.N.S. (Angry Neighbor Syndrome).

Like I said, déjà vu. Which brings us to the city council’s next tactic to clamping down on new housing supply: developer impact fees. Here is the rundown of the proposal, courtesy of the fantastic Publicola team. The logic goes like this: new development has negative impacts on quality of life (congestion, parking issues, etc.) and developers are the ones causing those negative impacts, so they should be charged a fee to fund mitigation of those impacts. On the surface, that sounds fairly reasonable, right? Finding a funding source for parks and schools is certainly a worthy and necessary goal. But that’s a Level 101 Scan. Those are conclusions you would reach if you didn’t think critically about the issue. Let’s move to Level 201 and see what we find.

Level 201 (a): Taxing The Thing You Want

From here on I am going to address you, the reader, as a pro-density urbanista who supports increasing housing supply and housing options in the city. If this doesn’t describe you, you won’t agree with the following conclusions because you don’t agree with the premise. Feel free to move along.

The first problem with developer impact fees is that, like Incentive Zoning fees, you are taxing the thing you want, which is density and the positive externalities it brings (sprawl-fighter, economy-booster, etc.). When you tax something, you get less of it. If we can agree that developers who help densify the city, providing housing for lots and lots of people is a good thing, then why aren’t we encouraging that behavior? Remember, Seattle is on a San Francisco-like rent rocket into the stratosphere and subsidization of housing, while critical, will never provide citywide stabilization or reduction of rental costs. Only letting supply meet demand (a.k.a. let our city-builders do their thing) will put a meaningful dent in housing costs. The logical conclusion then is to stop handcuffing the people who are trying to meet that demand with fees and taxes.

The Seattle City Council has fallen into the trap on this one: they direct their ire toward developers, begrudging them for their profits, presumably at the expense of the citizens. But the fact is, you actually punish those citizens when their rents go up because there isn’t enough housing to go around. I don’t have a soft spot for developers; I don’t know any and I’m not concerned with their ability to make money. What I care about is letting them build enough new housing to make a meaningful dent in housing costs in the city.

Level 201 (b): Where Would the Money Go?

If you dig into the potential legislation regarding impact fees, you find something rather insidious. The current proposal dictates that money for congestion mitigation be spent on: more roads. And no transit. The plan is to not only tax something that provides a civic good (more density, less sprawl) but then to use that money to further increase our car-dependency. This a problem, and here’s why: First, you cannot build your way out of congestion. We know this because we’ve studied it a lot, and given it a name: Induced Demand. The very knowledgeable city planner, Jeff Speck gives a primer here. So the council is considering using money to solve a problem in a way that will never solve the problem. Lewis Mumford once said, “Building more roads to reduce congestion is like a fat man loosening his belt to prevent obesity.”

But it gets worse. The premise that increasing density automatically leads to car congestion and parking woes is rather faulty. In fact, real-world examples show just the opposite. Vancouver, B.C. has made concerted efforts to densify its core and has seen traffic drop, not increase. Why? Because they chose to design their city around people, not cars. They induced the behavior they wanted. Building roads induces more driving. Washington D.C. has adopted a similarly successful strategy, and now 88% of new households are car-free. Any city, including Seattle, can choose to decrease traffic, if only it can muster the political, NIMBY-fighting courage.

Level 201 (c) Development Impact: Not One-Size-Fits-All

Our last critique of this proposal is possibly the most important in proving its faulty premises. Cursory glances at the proposed legislation indicate that a fee would get charged to all developers indiscriminately. It would likely resemble a fee-per-unit charge for all residential development. Here’s the problem: not all development has equally virtuous outcomes. Some development is good – high-density, transit-focused, increased neighborhood walkability – and some is bad – low-density, car-focused, increased sprawl. Why would we presume both models of development have equal impacts on quality of life? Because that’s what the council is implicitly suggesting when it proposes a universally-applied fee.

Worried about mitigating negative impacts? Then put the bad guys in the cross hairs, not the good guys. Builders of low-density, car-dependent sprawl are the ones we should be targeting for impact fees, because they’re the ones making an actual negative impact. Roads get more congested when we build more roads to get us to houses further away. In the same way that taxing the thing you want (high-density buildings) is a lose-lose, taxing the thing you don’t want is a win-win. Why? Because taxing something gives you less of that thing. In this case, by taxing sprawl, you would get less sprawl. The second “win” comes from the money you make from that taxation, which you can use to improve quality of life – better transit, more parks, schools, etc.

This is the direction we should be going if we are going to seriously consider developer impact fees. I applaud the council for at least trying to innovate, even if I think they could use some help. So please, let them know that you believe in a denser Seattle, a city with room for all who want to live here. We believe in equality and sustainability and aspire to curb sprawl and its many harmful impacts. That’s a goal worth having.