A group representing builders in Olympia is warning that proposed impact fee increases by the city will price more people out of the housing market.
City staff has recommended phasing in increases to park impact fees of 26-34 percent, depending on housing type, over the next two years. The proposal, which was presented to the City Council on Tuesday, comes after a report showed the city’s fees weren’t high enough to maintain the current ratio of people to park space.
Impact fees are one-time fees on new construction meant to offset the impact of new residents on public infrastructure and facilities. Olympia charges park impact fees to help buy and develop new parks.
Under the proposal, the park impact fee for single-family homes would go from $5,581 this year to $6,510 in 2019.
Olympia Master Builders represents those in the home building and construction trades in Thurston, Lewis, Grays Harbor, Pacific and Mason counties. It contends that such steep increases would result in fewer homes being built in Olympia and that the ones that are built will be more expensive.
The group notes Olympia is already a costly place to build. According to Olympia Master Builders, the city assesses up to $39,970 in building and impact fees on new single-family homes, compared with $27,803 in Lacey and $30,029 in Tumwater.
Stuart Drebick from Olympia Master Builders said the fee increases undermine efforts by the city to promote home construction, including recently approved changes to development regulations meant to encourage infill housing.
“This does just the opposite. It makes everything less affordable,” Drebick told council members Tuesday night. He said his group only learned of the proposed increases the day before.
Council members on Tuesday seemed leery of the increases as well, suggesting instead that the city look at imposing smaller increases or a longer phase-in.
“I’m stunned by the size of the increase,” said Mayor Pro Tem Nathaniel Jones. “As we’re looking at housing affordability, these fees seem to be counterproductive to that larger city effort.”
Council members also were briefed on the city’s 2019 operating and capital budgets on Tuesday. They will vote on those budgets in December.
The $156 million operating budget makes no major cuts to city services and includes money to address homelessness.