The city’s consultants did their best during last week’s open house but still couldn’t convince many in the audience of the city’s need to adopt impact and mitigation fees.

Concerns about increased housing costs driving growth elsewhere and shutting out borderline prospective buyers dominated questions from the audience of more than 60 people, including many developers and real estate agents.

City Manager Steve Burkett said city staff will review the consultants’ studies and create a proposal for the council to consider.

The numbers shown as "proposed" are the maximum the city could charge based upon state law, he said.

If the council approves all the fees, it could add as much as $9,037 to the current $15,800 building permit cost for a single-family home in the city, including the general facilities charges for connecting to water and sewer service.

Funds for parks

The fees would target four areas: general government buildings, such as a new city hall; parks and recreation, such as improving Keeler Park; police and public safety buildings, such as a new police department; and transportation.

Randy Young, one of the city’s consultants, said impact fees are collected at the building permit stage and are charged to residential construction by the dwelling unit and to commercial construction by the square foot.

The cost is added to the building permit and then to house’s cost so it is not paid by the builders, he said.

Impact fees must be spent within six years of being received or be refunded, Young said.

"Very few cities let that happen," he said.

When developing the fees, they first they look at the city’s growth forecast for 2030, Young said.

They based the fees on the city’s population doubling in 20 years, which is a slower growth rate than the city’s own comprehensive plan projects, he said.

Counters concerns

Charged by 70 cities throughout the state, impact fees increase development costs but don’t stop development, Young said.

The state’s growth is occurring in many of the 70 cities charging the fees, he said.

Bill Henderson, another of the city’s consultants, addressed three concerns generally raised regarding impact fees.

The first is people will build elsewhere, but those decisions aren’t based just on cost, he said.

Henderson noted Spokane has low impact fees compared to those proposed for Sequim but that’s only important if you want to live in Spokane.

Another concern is housing will become unaffordable, but other factors increase housing costs more than impact fees, he said.

A third concern is the timing is wrong, but delaying impact fees doesn’t jump start the economy and there are other reasons for down times besides impact fees, he said.

Human element?

"What about the human element?" said Kevin Russell of Clawson Construction.

"It will separate the ability of people to get a home and create a division of classes. There’s got to be some balance," he said.

Steve Smith said he’s both a builder and a real estate agent but lives outside the city so he doesn’t have any say regarding the proposed fees.

The city’s fees actually add $25,000 to a home’s cost, not $9,000, because there’s $16,000 in existing fees, which has a negative impact on sales, Smith said.

Young said most cities charge impact fees to builders although five cities charge them after construction.

What cities find is the market adjusts to the fees, he said.

Real estate agent Karen Pritchard said there’s no affordable housing in Sequim, apartments don’t count and Habitat for Humanity can’t afford to build here.

This has a broader impact on human lives; a lot more people are affected than just those at the meeting, she said.

Opposed by NPBA

The country probably hasn’t seen such a retraction of credit since the Great Depression, Pritchard said.

Real estate agent Brody Broker said the country didn’t see four years of falling home prices during the Great Depression.

Young said impact fees have existed since 1992 and "we’ve had down times since then."

FaLeana Wech said

Sequim buyers are a "value market" and they can’t absorb an additional $9,000.

Wech is the government affairs director for the North Peninsula Building Association. Sequim’s home prices already are on the high end for cities without impact fees, she said.

Young said if he can’t prove the need for a specific level of impact fees, then he can’t defend it against a legal challenge.

Florida has more impact fees and higher impact fees than anywhere else and still attracts retirees, he said.

Fees face meetings

City staff, along with consultants Bill Henderson and Randy Young, will present comments and questions from impact fee presentations during a council study session from 5-6 p.m. Monday, Feb. 22, at the Sequim Transit Center, 190 W. Cedar St.

A public hearing is set for 6 p.m. Monday, March 8, followed by a council meeting at 6 p.m. Monday, March 22, both at the Transit Center, where adopting the fees will be considered.

The rate studies used to determine the fees are available on the city’s Web page (ci.sequim.wa.us); at the Sequim Library, 630 N. Sequim Ave.; City Hall, 152 W. Cedar St.; and the Planning and Public Works Department, 615 N. Fifth Ave.

Send written comments to the city manager at sburkett@ci.sequim.wa.us or Sequim City Hall, 152 W. Cedar St. Sequim, WA 98382.

Reach Brian Gawley at bgawley@sequimgazette.com.