Ruling Moves Seattle One Step Closer to "Impact Fees" on New Housing

The council votes tomorrow on a fast-tracked proposal that assumes density, not housing scarcity, is the problem.

Rendering for a planned building on South Jackson St. that its developer said would not have been feasible with transportation impact fees in place.

By Erica C. Barnett

The city's hearing examiner, Ryan Vancil, just denied an appeal by housing developers seeking an environmental review of a proposed comprehensive plan amendment that will, if passed, begin the process of imposing "transportation impact fees" on new development across the city, adding to the cost of new housing in Seattle. The comprehensive plan is the city's long-term guide for housing, transportation, and economic investments.

The decision, which upholds a previous "determination of non-significance" for the transportation impact fee amendment, comes one day before the city council holds its first and only public hearing on the proposal at 2:00 Tuesday afternoon. The determination of non-significance, or DNS, means that the city believes that the amendment, if adopted, will have no significant adverse environmental impact.

"As a broad coalition of housing advocates have urged, the City Council should decline to rush forward on such a serious policy initiative that would undisputedly raise the cost of housing—with the impacts being felt most by those in need.”—Seattle Mobility Coalition

The appellants in the case, a group of developers organized as the Seattle Mobility Coalition, argued that imposing more fees on new development would reduce housing production, increase housing costs, and "undermine the goals of the Mandatory Housing Affordability ('MHA') program,” which allows denser development in some parts of the city and requires developers to either build affordable units on site or pay to build them elsewhere.

In a statement, the Mobility Coalition said it would be seeking reconsideration of the decision, noting that Vancil "acknowledged the evidence that adding transportation impact fees will make building housing in Seattle more difficult, resulting in fewer new homes, fewer contributions to the City’s Mandatory Housing Affordability framework, and the City’s affordability goals slipping further out of reach. As a broad coalition of housing advocates have urged, the City Council should decline to rush forward on such a serious policy initiative that would undisputedly raise the cost of housing – with the impacts being felt most by those in need.”

In his ruling, Vancil said the developers only demonstrated an "economic," rather than an environmental, impact from the potential new fees, and that they had failed to prove the city had failed to do an adequate review under the State Environmental Policy Act. According to a potential fee schedule the city introduced as part of its defense, the new fee could cost five to six times as much as annual property taxes on larger, denser apartment buildings.

As PubliCola reported last month, the city council decided, at the behest of outgoing Councilmembers Alex Pedersen and Lisa Herbold, to fast-track this significant change to the city's primary planning document, bypassing the council's land use committee after the chair of that committee, Councilmember Dan Strauss, canceled an earlier committee hearing on the proposal and said he would schedule a new one after the hearing examiner, Ryan Vancil, issued his ruling.

“I believe it is important that we receive the hearing examiner’s decision and have the time needed … to understand the policy” and hold a public hearing before voting the changes through, Strauss said. Although the comprehensive plan changes are only the first step (of two) toward passing the fees, the fees themselves could cost housing developers significantly more than the Mandatory Housing Affordability fees the city imposed in multifamily areas back 2019—and those fees only passed after more than a year of public hearings, focus groups, and at least 20 committee meetings.

In his ruling, Vancil noted that "there is no imperative or requirement that Comprehensive Plan policies be implemented through subsequent regulations"—in other words, the council could decide to allow impact fees but never impose them. Why the council would fast-track  legislation to allow new fees on housing and then just abandon the concept is a question the hearing examiner did not address.

Vancil sidestepped the environmental implications of future transportation impact fees themselves, agreeing with the city (and Councilmembers Pedersen and Herbold) that amending the city's comprehensive plan to allow transportation impact fees was basically a minor procedural change. In his ruling, Vancil noted that "there is no imperative or requirement that Comprehensive Plan policies be implemented through subsequent regulations"—in other words, the council could decide to allow impact fees but never impose them. Why the council would fast-track  legislation to allow new fees on housing and then just abandon the concept is a question the hearing examiner did not address.

Transportation impact fees are themselves based on the idea of impact—specifically, that dense, urban living causes negative impacts on the city's transportation system that housing developers must pay to mitigate. As Josh argued in a recent column, however, housing scarcity—not housing abundance—is the real threat to Seattle's livability. And rising housing prices in Seattle have had a demonstrable environmental impact, as more people have been forced to leave the city for sprawling, car-dependent suburbs.

"The regressive status quo forces renters to bear the carcinogenic brunt of the car culture that our suburban-style homeowner zoning promotes; and, because bus routes don’t pencil out in the vast majority of our low-slung city, we’re stuck with an inefficient transit system," Josh wrote last week. "Indeed, the best thing we could do for transit isn’t levying a tax on development, but adding more development that would support robust transit."