So I’ll dedicate this to all you Grand Bargainers out there, supporters of the City’s Mandatory Inclusionary Zoning (MIZ) scheme known as Mandatory Housing Affordability (MHA). I think this has a good beat and is pretty easy to dance to, but help me understand how impact fees fit with the Bargain? Developers were supposed to have some certainty now, right. They are going to pay their “fair share,” after all with fees on every square foot of housing built in the city if MHA is implemented. The truth is that the hunger for more and more cash for the City and non-profits can never be sated; it has no bottom. 

October 31, 2018

To:       Ketil Freeman, Seattle City Council Central Staff
From:  Roger Valdez, Director, Seattle For Growth

Re:       Record Number: 001763-18PN, Determination of Non-Significance (DNS) on proposal to amend the Comprehensive Plan to facilitate implementation of a transportation impact fee program.

Seattle For Growth has long been on record as opposing any and all impact fees including those for transportation (see attached for an example) or housing. The reason is simple: developers do not pay impact fees but, in the end, people who need housing, whether they are paying for that housing with a mortgage or rent, bear that cost.

Meanwhile, the City and its elected officials have been on record over the past several years repeatedly saying that there is a housing “crisis” in Seattle. That crisis is higher prices for housing. Adding to that problem with impact fees is therefore at odds with broader stated City housing policy of trying to ameliorate that problem.

While we acknowledge that impact fees are legal, today we want to go on record not just opposing adding more costs to housing with impact fees but also to the DNS; the City Council must go back and study the impact of adding to housing prices on the environment.

Environmental impacts of deliberately increasing housing prices include more car trips made by people who can no longer afford to live near their place of employment, school, child’s day, care, family or other necessities. In a previous appeal of the City’s change in Floor Area Ratios we made a similar argument: housing scarcity created by limits production and higher prices has implications on emissions caused by increased car trips and impacts on overburdened transit service.

While the documents cited in the DNS fail to address what higher prices would mean for the environment, one of them, the Seattle Pedestrian Master Plan Implementation Plan 2018-2022 says this about impact fees:

Additionally, there are well-documented arguments that hold that increased development fees will be passed on to consumers, exacerbating the already-high cost of housing in Seattle.

We believe the City must consider what those “well-documented arguments” mean not just for housing costs, but the collateral damage to the wider community when people cannot afford to live in the city and must make longer, more costly commutes.

The City must also study how these impact fees would combine with already proposed fees to fund the City’s Mandatory Housing Affordability (MHA) program to increase the costs of housing. Along with MHA, there are other mandates from the City affecting infrastructure like making new projects pay for redundant water infrastructure to keep utilities rates lower for existing homeowners. All these proposals are in total contravention to any rational effort by the City to lower housing prices. Impact fees will incrementally, but significantly, make this fusillade of ill conceived and incoherent exactions worse.

Finally, while they are legal, impact fees aren’t necessary. As we’ve stated repeatedly, the Real Estate Excise Tax (REET) already generates tens of millions of dollars that go into the Cumulative Reserve Fund (CRF) to fund transportation infrastructure. The City of Seattle has already made it a priority to increase the REET and expand its use. The City should compare what doing nothing would do with increases in price from impact fees.

We would urge the City Council to withdraw the DNS determination and study what the implications are for higher prices for housing, especially for those people who earn less, travel farther to work, and would bear the largest burden of the costs of the fees on housing and transit service.

Sincerely,

Roger Valdez
Director