With over a quarter of blocks missing sidewalks and a backlog of street projects, the city is contemplating adopting a transportation impact fee as a way to help pay for new infrastructure needed to handle growth.
Last week during a meeting of the Seattle Sustainability and Transportation Committee, Councilmember Mike O’Brien instructed city staff to begin developing a transportation impact fee schedule for these one-time charges paid by new development.
Impact fees were authorized by the 1990 Growth Management Act, and today most urban jurisdictions have adopted some kind of impact fees for roads or parks. The City of Sammamish has adopted some of the highest transportation impact fees, charging new single-family homes close to $15,000.
Seattle has considered impact fees for years. A 2015 staff report recommended further study of park and transportation impact fees, but competing priorities delayed the work. Councilmembers sitting on the Sustainability and Transportation Committee received an update on the progress last week.
These funds must be used within ten years of collection and spent on projects that provide capacity for future growth. Impact fees cannot be used to pay for existing deficiencies, but they can be used for transit or greenway projects, according to Kendra Breiland, a consultant from the firm Fehr and Peers.
“When you start thinking through all these parameters, many cities have started moving towards recognizing they can spend these funds not just on those traditional auto capacity projects, but we can spend them on much more multimodal projects,” Breiland told the committee.
She said transit projects could include off-board fare payment, transit signal priority, rapid ride corridors, in-lane bus stops or curb bulbs.
Breiland said that generally, the fees are based on the number of afternoon peak-hour trips each new development is estimated to generate. She also pointed to a nuance in state law that allows cities to charge impact fees on completed projects, just as long as they are still providing capacity for future growth. However, Breiland added, many jurisdictions don’t choose to do this.
City staff said the next step is for the Sustainability and Transportation Committee to review a project list the consultants and city staff assembled, after which Fehr and Peers would create and present a fee schedule. Action by the Council could happen as early as this summer.
The city webpage states a “draft impact fee proposal for consideration by the Mayor and Council” will include a list of projects that could be funded, fee rates and implementation legislation. According to the site, a park impact fee proposal will be developed after the Parks Development Plan is completed.
Breiland said a maximum defensible rate would be presented and the City Council could select that rate or set it lower.
Councilmember Rob Johnson, not convinced impact fees were a good solution, wanted to also study other tools cities are using to pay for transportation projects.
“The anxiety that I feel about impact fees is just generally the inconsistency of revenue generation,” Johnson said during the committee meeting. “There could be years where we are generating a heck of a lot in impact fees and there could be years where we are generating very little, and that consistently causes me to have some long-term budget concerns, which is part of the reason we need more progressive tax reform at the state level.”
If “impact fees cannot be used to pay for existing deficiencies,” how will this help address the missing sidewalks you cite as possible justification for the creation of this fee?
What’s the difference between existing deficiencies and nonexistent infrastructure? Sidewalks would help a development, regardless of whether the block already existed or is newly built.
Mike, the article says the funds can’t be used for existing deficiencies. The lack of sidewalks in neighborhoods is an existing deficiency. Unless we are talking about adding sidewalks to new constructions, these fees can’t be used to address what the article proposes they be used for.
I’m making a logical argument, not a legal one. How far can the two be distinguished? And do we have an expert opinion that impact fees can’t be used on sidewalks, or is that just an armchair opinion?
+1
The city can’t be taken seriously on multimodal transportation until it completes sidewalks on most neighborhood streets.
I think this issue is worth clarifying by STB.
Completing sidewalks on most neighborhood streets would cost hundreds of millions of dollars. There are a lot of them. That’s why it hasn’t been done yet.
At current funding levels it will take over 300 years to build sidewalks along all of the blocks in Seattle that don’t currently have them. Yes, you read that right. No, it’s not an exaggeration.
A piece on the urbanist.org from Aug 2015 put the cost of completing sidewalks in all of Seattle at $675 million.
https://www.theurbanist.org/2015/08/18/map-of-the-week-lack-of-sidewalks-in-seattle/
I don’t get people who say stuff like this. What able bodied person (and that is most of us) cares about walking along the side of a street without sidewalks? Most of the streets in Seattle without sidewalks have low traffic volumes anyway, so it isn’t a big deal. Sure, I guess it would be better if these street had sidewalks, but it usually makes no difference in my decision to walk or not (I bike in the street no matter what, so it makes no difference there either).
There are plenty of legal experts who understand how cities can impose impact fees. I’m not one.
It’s my general understanding that many improvements can be impacted by traffic increases. For example, if a low-volume street that people use as a sidewalk gets more traffic, adding sidewalks could be linked to new development. Consider that pedestrians walking on street pavement do theoretically reduce traffic capacity. I’m sure there are some legal tests that have to be met, but I could see it.
I don’t follow Rob Johnson’s concern about the revenue being inconsistent. The whole point of the revenue is to pay for capital improvements which are only needed due to increase in infrastructure demands. If there’s growth, we’ll need to pay for projects like sewer upgrades, new substations, off board payment, etc. If development stops, our current infrastructure which got is to this point can keep us going.
I wonder if there is a way to only charge impact fees on new class A office space. We have a housing crises so I wouldn’t want to discourage new housing with additional fees. Furthermore, the cause of the housing crisis is a rapid increase in the number of high paying office jobs. Currently housing development is caused by office development. So from a certain perspective, the impact of additional residents is caused by office development.
As I recall, Bellevue charges different impact fees for housing vs office space, so it’s definitely possible.
I suspect Johnson’s concerns are based on the reality of how we actually design and fund capital projects. We don’t build a bunch of new housing and then say “oh, we should have a bike lane here!”
Instead, we create a 20 year plan for various transportation needs, and that plan guides priorities. Actual project building is typically a multi-year affair (sometimes 5-10 years), pulling in state and federal grants. Those grants are often matching funds with use-it-or-lose-it timelines, earmarked for that specific project. Meanwhile, building development is left up to the private sector, which may stop completely in the midst of a recession. So we’ve spent 4 years planning/designing/getting the funding for a project with the expectation that we’ll match federal funds with a mix of city and impact fees, and then developers stop building. Do we delay the project (or give it up )and forego the federal revenue? Do we issue bonds to cover the lack of impact fees? Impact fees must be used on projects that provide capacity for the new development, so what happens when developers are building a bunch of new stuff but we don’t have any capacity projects planned?
“Impact fees must be used on projects that provide capacity for the new development, so what happens when developers are building a bunch of new stuff but we don’t have any capacity projects planned?”
The funds simply accumulate, subject to the sunset provision.
There is a potential problem if cities depend on impact fees for capital construction but don’t have money for ongoing maintenance. That’s why the suburbs are a pyramid scheme, and why economies based on home construction like Bend, Oregon and Las Vegas fell so hard in the crash. Impact fees are easier to get through the legislature and cities because existing homeowners think they won’t have to pay them: only the evil developers and new residents will pay them, which serves them right for taking our space and views. Impact fees also reflect the fallacy that everything is perfect now: there are no existing problems like missing sidewalks. But we need faster buses now, regardless of whether the new development is built. We shouldn’t have to base adequate transit on impact fees: everybody should pay for it as a basic service.
Rob Johnson’s argument is different, that impact-fee revenue is volatile. That’s true and is a concern, but it’s not the fundamental problem. The fundamental problem is viewing new buildings as being a negative impact rather than a way to positively house the growing population, because all residents are members of the city and deserve equal treatment, not just existing residents.
I agree with Rob that the term sounds like Oldbureaucratospeak for what used to be called permits, licenses, and fees of many titles, including taxes. Collected for the exact purpose of paying for the repairs and improvements necessitated by and for beneficial activities.
Almost as bad as using the word “impact” as a verb to mean “affect”. Suggesting that title of a fee is as important as a comet colliding with the world. If a government is to scared to ask for taxes, bet vote count for impact fees will be seriously impacted by taxpayers’ contempt and disgust.
From most sources, insisting on correct name for a spade is not racist. In fact, more accurately used to note that “Restrictive Covenant” does not mean a gentleman’s agreement on curtains for the club. World War I British soldier would’ve insisted, from direct experience that a spade should be called a bloody shovel.
However, the great sweet English poet and playwright Oscar Wilde has an aristocrat lament: “It is a sad truth, but we have lost the faculty of giving lovely names to things. The man who could call a spade a spade should be compelled to use one. It is the only thing he is fit for.”
And a rich city that won’t compel millionaires to pay reasonable taxes might deserve dig its own sewers with a little green folding shovel. Except that since the draft died, few in the governing class of such places know how. So Shout-out to ST Executive Director of Operations Bonnie Todd, who learned from the US Marine Corps.
Mark Dublin
“And a rich city that won’t compel millionaires to pay reasonable taxes”
It’s not the city, it’s the state. The state won’t allow progressive taxes. And the state constitution prohibits unequal taxation so that may block a wealth tax. Although we should study it further rather than accepting it as impossible, or possibly amend the constitution slightly.
Thanks, Mike. Wandered away from specifics and details into mistier realms. “City on the Hill” has no recorded city limits. Also, No mention of civil engineering at all, especially Water Quality. But this life or the After-one, best to think of it as a cooperative, with or names on the papers. And not complain about sewage assessments.
Mark
This is exactly the opposite of what we should be doing.
The city should be asking what they can do the decrease the cost of building new housing, not increase it. They already increased the cost through MHA, and now they are tacking on additional fees before MHA is even finished.
We also just had a huge jump on property taxes…
All of this will translate into decreased housing production and higher rents in the long term.
If they have to have a new tax it should be an income tax or even the somewhat controversial head tax. Really though, they should take a break from new taxes and get their fiscal house in order.
“Really though, they should take a break from new taxes and get their fiscal house in order.”
What makes you think their fiscal house is in disorder, or that enough money can be recovered to meet all Seattle’s needs, or that the needs aren’t urgent? Somebody who’s on the verge of homelessness now or forced to live in a far-flung suburb would say the need is now and can’t wait a decade. All this jump in taxes is because things were neglected earlier so we weren’t ready for the growth.
I can’t stand these kind of sob story arguments that are used to shut down rational discussion.
1. Impact fees will not help the homeless. Quite the opposite.
2. Taxes have gone up dramatically over the past couple of years. City revenues are also up due to an improved economy. Yet, the city is running a deficit. Also, the city continues to fund some programs of minimal impact, such as some homeless services that have low occupancy rates. At the same time, we lack basics like a sufficiently sized police force. This suggests that the budget needs some fat trimmed and resources reallocated. It will happen now, or during the next recession…
https://www.theguardian.com/uk-news/2017/jun/15/cladding-in-2014-melbourne-high-rise-blaze-also-used-in-grenfell-tower
Brits are way ahead of you, Brendan. Recall hearing they’ve indeed resulted in increased residential construction. Cities aren’t even allowed to waste money and limit growth by inspecting affordable plastic buildings. As with all ex- public works, the private companies that own the buildings can by definition do that cheaper.
But we can take back our prudency championship by not only eliminating fire codes, but also save a fortune on those extravagant sewers by selling tenants, with a slight service charge, one small olive drab folding shovel per unit, purchased by lot at any surplus store. Or maybe a carport with boards with holes for seats. Remember, germs are only a theory. Every American doctor knew that in the Civil War!
British Airways Flight BA-48 clears the tower at 7:20 tonight.
Mark
That’s an incredibly bad-faith argument, Mark.
Imposing additional fees on housing, whether through MHA or impact fees, has been shown to depress new housing construction. Wanting fewer such fees isn’t even remotely comparable to wanting to do away with fire codes.
I saw videos of Edinburgh and Croydon trams. In built-up areas they have an entire lane on two-lane streets, and when they turn at an intersection they turn onto another exclusive lane. Try imagining that in east Seattle or north Seattle.
And the companion argument to building new housing is that we also to need to speed up transit improvements (whether it is ST3, more rapidrides, etc) and increase our current transit capacity for the new housing (more buses). The question is how under our current tax system? (i.e, no state income tax, sub-area equity, etc).
Metro is steadily increasing service right now, and has proven ridership growth for anyone who doubts it. Metro’s LRP is only partly funded with projected revenues but there’s still time for the county and/or cities to address it. A countywide roads or possibly roads+transit measure is being deliberated, and even if it’s roads-only it may emphasize RapidRide arterials, because the roads drivers care about are the same ones that need more bus service (since it won’t be freeway bypasses). St3’s program is long but at least it exists. The answer for how to use the current tax system is to prioritize transit over other projects, and keep on saying that transit is a basic service, and that all residents should have access to good transit so they don’t have to drive (although not to every isolated house: they’ll at least have to go to the nearest arterial to find transit).
Subarea equity is more in King County’s favor now: it prevents Everett and Tacoma from prioritizing themselves first, which some officials have actually suggested because Everett and Tacoma are part of the original promised spine, and West Seattle and Ballard and infill stations aren’t.
This is a complicated subject matter and, frankly, one that I doubt most council members are particularly well-versed in. I hope they are consulting heavily with the experts in the relevant city departments in addition to this outside consultant mentioned in the article. (I know the developers’ perspective more so than the assessing agency’s, having a spouse who works for a local residential developer.)
Like others have stated in the commentary so far, these impact fees raise new housing costs and thus for a city/region dealing with a housing affordability issue the city finds itself in qite the quandary.
Please keep in mind that there are a host of impact fees that are authorized under state and local codes. This site does a pretty good job of providing a primer on the subject matter:
http://mrsc.org/Home/Explore-Topics/Planning/Land-Use-Administration/Impact-Fees.aspx
Finally, this blog piece reminded me of an Everett Herald article I read a few months ago that discussed the issue of school district impact fees and housing costs:
http://www.heraldnet.com/news/school-impact-fees-to-get-another-look-from-county-council/
*correction: quite the quandary
Also, if one is curious as to what to expect from a study/report by Fehr & Peers, you can get some idea by taking a look at the report they produced for the city of Bothell back in Oct 2014. An excerpt from said report indicated the following:
>>>COMPARISON WITH OTHER IMPACT FEE PROGRAMS
The Bothell impact fee rates were compared with selected other jurisdictions, as listed below. Comparative rates are shown for single family residences, but similar relationships apply for other land use types.
– Redmond 2014: $5,159 outside Downtown / Overlake
– Woodinville 2015: $3,550
– Kenmore 2012: $8,086
– Kirkland 2013: $3,942 (being updated. Likely to increase in 2015)
– Issaquah 2014: $1,760
– Sammamish 2014: $14,204
– Bellevue 2013: $2,651, up to $4,419 in 2016
– Snohomish County: $2,475
– Lynnwood: $8,023 ($5,158 in city center)
Bothell’s proposed rate of $6,494 is within the range of these nearby agencies. The regional trend has been to start increasing impact fee rates over the past two to three years as growth has accelerated along
with project costs.<<<
Another idea. What if we instituted impact fees in proportion to the number of buildings going up. That way, when the economy is down, building would be cheaper, encouraging building to be more consistent.
This flexibility is what an economist would have you do. But it’s hard for cities to react in real time. And the developers paying more are going to argue that they’re being treated unfairly.
I think the argument about year to year volatility is pretty well irrelevant. There are always going to be projects that need doing. The cities can decide how much they want to spend on a pay as you go basis, and how much they want to hold onto for (qualifying) projects. Impact fees can’t be the only source of funds but they can be part of the mix if managed right.
10 years is an awful long time to put these fees to use. I don’t see the problem with ecomic fluctuations. If there is a dip in the market, then some stuff doesn’t get done. The same goes for gas taxes, sales taxes, income taxes, etc. Sometimes adjustments must be made.
At least in Seattle, owners are responsible for sidewalks. How are impact fees preferable to levying a special assessment on existing owners who have failed to build sidewalks on their property? There might be a case for public money funding sidewalks in areas annexed north of N 85th St, since I think the city promised sidewalks in the 1950s and then reneged on the annexation agreement, but that’s not the case in most of the city.
In my hometown of Appleton, WI, homeowners are responsible for maintenance of the adjacent street itself, and the city regularly levies special assessment to pay for maintenance. It’s all part of the responsibility of property ownership.
That so-called promise to build sidewalks in the north Seattle annexations may be a longstanding myth. The annexation documents themselves don’t make the assertion and those people who have tried to research the claim have been unsuccessful at substantiating it. Still, the story persists to this day.
Here are some relevant links on the subject matter:
https://www.seattlepi.com/local/transportation/amp/Getting-There-Did-the-city-promise-sidewalks-to-886368.php
http://www.historylink.org/File/7514
This is the link to the city clerk’s archives:
http://clerk.ci.seattle.wa.us/~F_archives/annexations/annex_list.htm
Interesting, thanks for the history lesson. That points even more to property owners’ responsibilty to build the sidewalks.
So as someone who lives on a busy street with no sidewalks, please don’t use the fact that I don’t have sidewalks as an excuse to build other people sidewalks… Can we maybe build sidewalks in our 15 min walk zones from the light rail stations…
“CITY OF SEATTLE IMPACT FEE POLICY ASSESSMENT AND WORK PLAN DEVELOPMENT
WORKGROUP SUMMARY REPORT”, June 2015
So what happened to this whole plan? Didn’t the city allocate some $300k or $400k already back in 2015 to move this process forward?
If only a land value tax were legal under state law, then we could have a consistent revenue stream while not impacting development.
They should be able to be used to build sidewalks in areas where a large upzone is planned. The lack of sidewalks for a huge increase in people should be considered a non-existing deficiency. Also, there is plenty of upgrades that could use impact fees like new schools, upgrades to streets near buildings, traffic controls, electricity/power grid and the like. All this stuff costs money and shouldn’t only be paid for by property tax and utility rate increases. Builders need to pay their fair share.
So much for more affordable housing. I thought Seattle was getting tired of property taxes.
“’The anxiety that I feel about impact fees is just generally the inconsistency of revenue generation,’ Johnson said during the committee meeting. ‘There could be years where we are generating a heck of a lot in impact fees and there could be years where we are generating very little, and that consistently causes me to have some long-term budget concerns, which is part of the reason we need more progressive tax reform at the state level.'”
If the fees have a 10-year spending window, which is roughly the same length as the longest typical business cycles, this is not an issue as long as the city exercises a little prudence.