Chalk Line

Postponing Impact Fees Keeps Jobs

Will Stakelin
Government Affairs Director

Everyday in the news we hear about housing market woes and a declining economy in other parts of the country.  Business owners know better then anyone that tough times call for drastic measures to keep things in the "black" and moving forward.  Unfortunately, many local jurisdictions don't get the simple fact that in order to attract revenue created from the development and building process they too need to take "drastic" measures.  There are several fairly simple steps each jurisdiction can take to partner with builders and let them know that they (local governments) are willing to modify some things during tough times.

According to a recent article by John Caulfield in the Builder Online News Service there's a push in other states, such as California, for local government to defer the collection of impact fees and postpone collecting the fees until projects are finished.  In an effort to provide relief for the struggling home building industry Orange County, California, will be deferring the collection of impact fees for a year and then re-visiting the issue once the economy improves.

The article goes on to say that Orange County's decision came only weeks after Anaheim, California, took action to delay impact fee collections as part of a stimulus package that includes green building and affordable housing incentives. 

Mason County is a prime example of where the idea of postponing impact fees should be considered.  The local economy is struggling, water availability in a large section of the County is under attack by a local tribe and the Department of Ecology and in the middle of everything the City of Shelton is proposing their first impact fee to help fund transportation projects and local school districts are pushing for countywide school impact fees.  If adopted, these would be the first impact fees implemented in Mason County and the timing couldn't be worse with the struggling economy. 

The issue isn't with local government's ability under state law, thanks to the Growth Management Act, to impose impact fees on new development.  Imposing impact fees is nothing new and doesn't make Shelton or Mason County any more progressive than other communities by any means.   What would make a city or county uniquely progressive would be the postponement or deferral of impact fees in light of existing business conditions.

There's no doubt that our local no-growth proponents will adamantly oppose deferring impact fee payments arguing that growth must pay for itself (which it more than does) and that the deferral only serves to put more money back into the pockets of builders and developers.  The truth of the matter is it does just that for one critically important reason - so builders and developers can keep people employed which contributes to a healthy economy. 

If builders don't have to borrow money to pay the fees upfront then the savings in interest-rate costs and lost opportunity costs can be used for construction and maintaining employment.  The good news for local government is there is no evidence that postponing the collection of impact fees delays the placement of infrastructure, but it does help in keeping revenue and job generating projects moving forward.