Exponential Increase in Transportation Impact Fees Could Add Stress to New Home Prices

The city of Spokane Plan Commission is nearing a recommendation on new impact fees for structures inside city limits. These recommendations will be presented to the Spokane City council, which will debate and vote on these changes in early March. Below is where the Plan Commission suggestions seem to be heading.

 

New District Boundaries - In addition to finalizing a new fee structure, the maps for where transportation impact fees are charged is being debated. The prevailing idea has the "south" district split into two separate districts. One district would be the Latah Creek area, and the other being the South Hill. This matters because impact fees charged in districts can only be used for projects in that district. Currently, the south district has Latah Creek and the South Hill in the same district. Meaning impact fees collected in Latah Creek both previously and in the future could be used for projects on the South Hill.

 

New Fees - Here is where the pain will be felt. The leading idea for restructuring impact fees in Latah Creek includes a 600% or more increase in price. Currently, it is a little over $1,000 in impact fees to build in the Latah Creek area, and the leading idea to increase those fees is in the $6,000 - $8,000 range. Some proposals even had increases above $14,000 for impact fees, but those ideas seem to have faded away.

 

What are Transportation Impact Fees in Washington State?

Impact fees, in general, are one-time charges from the local government on new projects to help pay for new or expanded infrastructure that will directly address the increased demand for services created by that new project in regards to transportation. Put simply, builders applying for new projects have to pay a fee that helps build new or existing roads and sidewalks to offset the new strain on infrastructure from that project. An example being that building more homes in Latah Creek would increase traffic on HWY 195, and with that increased traffic, there may be a need for j-turns, new roads, turn signals, etc., to offset the impact of the new homes being built.

 

The Current Situation

A moratorium has been in place for the neighborhoods of Latah/Hangman and Grandview/Thorpe since September 12, 2022. The Spokane City Council voted 5-2 during their meeting that night to impose a moratorium on building permits until the Plan Commission could give their recommendation on revisions to impact fees. The city did this to buy time for themselves to update the transportation impact fees along with the general facilities charges. As of now, the city Plan Commission is working to find a solution and has a public hearing scheduled on Feb 22, 2023. After this, the Spokane City Council will have hearings on this in the first few weeks of March. Unfortunately, there is talk of potentially extending the moratorium on building permits in those areas if an agreement is not met.

 

What is next?

Before the Spokane City Council votes on the new Transportation Impact Fee maps and pricing structure, the Plan Commission must submit recommendations. On February 22nd, at 4 pm at City hall, the Plan Commission is having a final hearing regarding its recommendations. This public hearing is crucial as it is one of the last times builders can comment on these huge impact fee increases. 

 

We need you

Feb 22nd, 2023, at 4 PM at Spokane City Hall is the last time the Plan Commission will have a public hearing on transportation impact fees before giving their recommendations to the Spokane City Council. We need builders to come and testify regarding these fee increases to let the Plan Commission know these increases are too much. To get involved, please contact jclark@shha.com, and we will get you all the materials you need to testify.