The Journal’s View: Development-fee compromise works; more must be done
~March 30th, 2023
The Spokane City Council acted correctly in scaling back its development fees for the time being.
In the upcoming 11 months, before the full 1,400% increase in development fees is due to kick in, the city’s leaders should participate in a broader conversation about how best to fund roads and other infrastructure improvements within the city. The Council also should look at broadening its efforts to address affordability, as the measures currently taken will hurt homeownership attainability for the middle class.
After walking back the fees, known more formally as General Facilities Charges, those costs are increasing by 66%, a large jump but much more palatable for prospective homeowners. Council President Breean Beggs says the compromise will enable developers with projects underway “to submit a building permit to accelerate building that is much needed to both increase housing in 2023 and increase the available funding for infrastructure.”
That makes sense. Great point. But Beggs’ follow-up comment is more concerning. He says, in a prepared statement, “The bottom line is that existing ratepayers will stop subsidizing new housing infrastructure while fully incentivizing permanently affordable housing.”
In terms of subsidizing new housing infrastructure, who does Beggs think is paying the additional fees? It’s not the developers. Those fees are passed directly to new homeowners, thereby making homes more expensive—and less obtainable for a portion of the population. The Council isn’t going to legislate home builders into taking smaller profit margins.
And let’s talk about affordability. Under the new rules, the impact fees are waived for homes bought by families with annual incomes of $84,000 or less. There are some conditions attached to the waiver that Realtors don’t like, but for now, let’s just focus on the face value of that waiver.
Last month, the median price for any home sold through the Spokane Multiple Listing Service was just over $375,000. That’s new and existing homes. In the current market, short some sort of financial windfall, a first-time homebuying family at the top of that $84,000 income range is going to struggle to qualify for a loan for a median-priced home, much less a more expensive, newly constructed house. The current measure will do little, if anything, to address affordability, and the Council must look at additional options to make homeownership more attainable, if it’s going to boast that mission.
That said, the optimist would say the compromise approved earlier this week is a step in the right direction. The Council has an opportunity to become thought leaders on the complex subjects of housing, affordability, and funding essential infrastructure improvements.
We hope the compromise isn’t the end of the debate about development fees, but rather start of a broader conversation about how we invest in the city’s future and prepare for growth that’s desired and likely inevitable.
As a community, we deserve a broad, transparent conversation in which all voices are heard, and 11 months is a suitable amount of time to have such discourse.