Burdensome Impact Fees

Those pesky impact fees many cities charge for developing a new property are adding up to be quite a large chunk of change. The motivation behind charging impact fees is to recover the cost of added strain of the development on the public facilities, such as schools, roads, parks etc.

The city of Olympia is authorized to charge impact fees under the Growth Management Act. The way these fees are calculated is a vague formula based on rate studies. The high cost of impact fees is driving up the price of new construction homes, making it even more difficult for first time home buyers, or low income families to afford a home.

On the one hand big retailers like Cabelas are given incentives and tax breaks to come in and develop and build their businesses locally, and on the other hand single family homes are taxed to the maximum. Doesn't the added increase in property taxes and excise taxes fueled by real estate, make enough of a financial impact for the local government?

Olympia impact fees for a single lot are currently around $17,000. This does not include the electrical hook-up fees, the connection to the sewer fees, or any permit fees.

How can a consumer wanting to build a home avoid paying some of these costs?

Here is a suggestion: Instead of looking for vacant land properties, explore residential properties with small homes in poor condition, that could easily be torn down. Since a building already exists, there won't be any impact fees, and most likely there is already power, water and sewer connected to the home. I recently saw a property with a "tear down" listed for $99,000 on the MLS. A vacant lot in the same neighborhood costs $89,000. So why pay impact fees?

Sandy Nelson
Realtor for Olympia area real estate
www.sandynelsonrealestate.com