As if things weren’t bad enough, the Seattle City Council is considering impact fees, the charges applied to new development allowed by State law to off set the impacts of new growth. Largely limited to the suburbs, impact fees add costs to new housing and therefore increase the price of that housing. In a way, impact fees make more sense than Councilmember Mike O’Brien’s linkage tax, and illegal tax on all new housing built in the city because there is actually some related infrastructure built that benefits the residents of new housing with impact fees. We should be wary when people start saying things like, “growth should pay for growth,” when they argue for impact fees. The truth is that in Seattle, it already does. Impact fees here would simply make housing less affordable.

I have already pointed out that new development already pays lots and lots of fees, taxes, and charges that contribute adjacent infrastructure (e.g. sidewalks and drainage) and infrastructure all over the city. Take a look at the Cumulative Reserve Subfund (CRS), funded by Real Estate Excise Taxes (REET). Here’s a breakdown from last year’s City budget proposal on what the CRS pays for citywide:

► CRS REET I Support to Transportation  $3,500,000

► CRS REET II Support to Transportation  $26,534,000

► CRS Street Vacation Support to Transportation  $2,056,000

► CRS Support for Operating & Maintenance Expenditures – $1,000,000

► CRS Support for Operating & Maintenance Expenditures –  $1,000,000

The CRS also funds about $400,000 in tenant relocation assistance. And that vacation support to transportation? That comes out of the fees builders and developers pay when they get an alley or right of way vacated by the City; it’s something that they pay fair market value to the City.

So tell the Seattle Times, the City Council, and others that want growth to pay for growth that, in Seattle, it already does. Oh, and guess what? Almost all of these costs are also paid by non-profit housing developers buying land and building housing with subsidies and borrowed money. In the case of private for-profit developers these costs are absorbed by the renters. In the case of non-profit housing, that gets paid for by, ironically, the taxpayer since the subsidy gets consumed by these costs rather than by actual housing construction. That’s part of the reason affordable housing is so expensive to build.

Instead of trying to address these costs in ways that would reduce housing costs, the City Council is making it worse, spending precious time trying to figure out how to add even more costs to housing and thus to its price for the consumer with impact fees. It’s like I said over the weekend, sometimes I feel like I’m taking crazy pills.