Olympia wants to remove tax exemption for senior housing developments

Developers who build senior housing in Olympia may soon face higher fees under a proposed ordinance that would benefit city parks.

Senior housing has long been exempt from park impact fees, which are one-time taxes applied to new residential developments. These particular fees go toward park maintenance and projects.

City code currently exempts all housing built for residents age 62 and older. However, developers who build housing for ages 55 and older have been using an “independent fee calculation” to qualify for the exemption, the city reports.

The proposed code revision could bring substantial revenue to the city. Developers of Affinity at Olympia, which opened in February with 170 units on the west side, paid $52,700 in park impact fees – but saved $465,800 because of the exemption, according to the city. In another example, the Silver Leaf project at Briggs East Village was billed $16,430 in park impact fees, but saved $145,220 with the exemption, according to the city.

Jonathon Turlove, associate planner with the parks department, said the extra money would make a significant impact on city parks.

“We keep hearing from the community about a whole lot of needs that are out there, everything from dog parks to more ballfields,” Turlove said.

Under the new ordinance, senior housing will be subject to the rate paid by multifamily housing developments, which is $3,050 per unit. By comparison, the park impact fee for a single family residence is $5,090. Assisted living facilities and nursing homes still qualify for the full exemption, according to the ordinance.

After unanimously approving a first reading this week, the Olympia City Council is expected to vote on the ordinance Aug. 12.

The initial exemption was created under the idea that parks were in lower demand among seniors. Turlove said seniors use parks more often these days because they are living longer and leading more active lifestyles. Consulting firm FCS Group was hired by the city to make recommendations on new park impact fees for senior housing.

Impact fees add cost to development and are a barrier to business growth, especially for smaller builders, said Adam Frank, government affairs director for the Olympia Master Builders.

“Generally, big builders can afford it, but that’s not to say it doesn’t bug them to pay it,” said Frank, who favors lower impact fees across the board. “Our argument is that growth pays for growth.”