Impact fees are standard monetary procedure for developers in the majority of cities throughout the state and country.

The fees set by various agencies and municipalities go toward shoring up the cost of additional infrastructure needed for a new business or home.

And not surprisingly builders hate them. “We are adamantly opposed to impact fees,” said Erin Shannon, public relations director with the Building Industry Association of Washington. “They unfairly target the new home buyer.

“If you have, say, a family moving from one home to a (newly constructed) home in a nearby neighborhood, they won’t have any new impact but they still have to pay impact fees. But a family of six moving in from out of state pays no impact fees if they buy an existing home even though they will have an impact.”

Shannon’s point illustrates another reality of the business.

“Builders don’t absorb the cost they pass it on to the purchaser,” said Art Castle, executive vice-president of the Kitsap Home Builder’s Association. “And it’s a significant cost.”

A problem builders foresee is that fees could make it prohibitive to build. The Kitsap association calculates that, in the near future, various lot development costs, including impact fees, could total $50,000 for a new home.

“If you add that much more to the cost of building how many new homes will get built?” Castle asks. “If there are fewer homes built, that’s $50,000 that won’t go into the public coffers.”

Castle said current impact fees in unincorporated Kitsap County are $2,000. Of that, $900 goes toward schools, $500 toward roads and about $500 toward parks. There are additional impact fees within city limits.

Some cities, such as Tacoma, function without impact fees. But even with property taxes, construction funds, bonds the Real Estate Excise Tax, other cities without deep pockets find it harder to come up with the money. Castle said, as budgets get tighter it’s unlikely the revenue stream from impact fees will be voluntarily dammed.

It comes down to a population willing to pass the buck, he said.
“They (impact fees) are popular and politically acceptable,” Castle said. “Because the public feels anytime somebody else is paying it’s good.”

The Municipal Research and Services Council, which advises cities throughout Washington on legal issues, says infrastructure costs will exist whatever tax arrangement exists.

“Each community will need to make a policy decision about whether the cost of new infrastructure is charged directly to the new users or spread, via higher taxes, across the community,” the research council reports. “Infrastructure costs in areas where there is little current development can be substantial.”

Shannon said though they are working toward elimination of impact fees, there are other solutions to consider. A move among builders is to try and delay the time when impact fees are due.

“We want them due at the time of occupation,” Shannon said. “Right now the builder has to pay fees at the time of buying the lot. That means the carrying costs are passed onto the purchaser. What was $1,000 in impact fees can turn in to $3,000 at the end of the process.

“That’s not directly the government’s fault but they are the ones who can change it.”

(Temple A. Stark is a free-lance writer living in Port Orchard. Reach him at writer@harbornet.com).