After reading the article in Thursday’s paper titled “Olympia budget headed for deficits,” where Mayor Buxbaum reiterated a desire to “grow the city’s revenue base through economic development and investment,” I had to respond with a simple solution: Keep single-family housing affordable and provide an atmosphere where businesses thrive.
Lowering permit and impact fees in the city might seem counterintuitive. After all, the city collects around $30,000 in fees before a shovel is ever put in the ground to start building a home. One might think “Great! More money in the city’s coffers!”
Not great, according to the National Association of Home Builders (NAHB). For every $1,000 increase in the cost of housing, 207 households are priced out of the housing market in Olympia. The potential revenue new housing can bring into the city’s coffers is far greater than $30,000 in fees.
According to NAHB’s Metro Area Impact of Home Building study, the 312 houses built in Thurston County in 2012 generated $65.8 million in local income, $11.2 million in local taxes and other revenue for local government, and supported 1,107 jobs in the first year.
Building homes also creates a ripple effect in the local economy. Construction workers spend money earned on local goods and services, and residents of a new home spend about three-fifths of their income locally. In addition, the average household pays about 1.25 percent of its income in taxes to local government.
Think about the potential earnings for a city that encourages affordable housing.