REALTOR® testimony key in making the case to save housing construction
In response to fears of a housing construction collapse in Spokane, the City Council agreed to roll back an increase of $20 to $25-thousand to about $6,000. The move comes after local builders, developers and REALTORS® warned of the serious damage this move would cause in the midst of a severe housing crisis. A poll released by Spokane REALTORS® and the Spokane Homebuilders Association revealed over 2,000 construction would immediately be shut down because of these high fees. The move would have added about $20,000 to the price of every new home, and housing unit. For example, a fourplex would have seen an extra $100,000 price tag alone just from the connection fees known as General Facilities Charges (GFCs).
Spokane City Council members effectively caused this shut down in the face of a rising costs for new projects and system repairs. In an emergency vote, the council approved an additional $19,000 to $32,000 per new house to for water/sewer hookups and transportation fees. The impact fee for transportation remains in place, adding up to an additional $6-$11,000 per lot based on where you build.
Led by Spokane REALTOR® champion and council member Jonathan Bingle, the fees will be rolled back until March 4, 2024. “This is not meeting me even close to halfway, said Bingle, who had also asked for waivers to stay in place in low-income areas, but was rejected. The council passed the measure 6-1, with council member Betsy Wilkerson voting to keep higher fees in place.
Additionally, Spokane REALTORS® presented the council will a petition signed by about 900-members and consumers asking the council to roll back these fees.
In a poll conducted by Spokane REALTORS® and the Spokane Homebuilders Association, the top 100+ builders, developers and REALTOR® builders were asked what the impact of these fees would be on the City of Spokane’s Housing market.
“March 13th will forever be remembered at the day housing died in Spokane,” said a frustrated Spokane REALTOR® President Tom Hormel following the vote. Both he and SR Governmental Affairs Chair Tom Clark joined other REALTOR® members in testifying at each hearing.
It’s important to note, water and sewer fees are often collected at the end of a building project and are paid directly by the new owners and are not paid by developers. The plan, which was unveiled as an Emergency Measure, leaving no time for analysis, debate, or consideration. Under this new plan, Spokane City staff and the Planning Commission will now conduct a formal process to develop new fees, with a deadline of March 4th, 2024.
“Spokane doesn’t realize it won’t be collecting these fees, as this will only force building to go outside of the City,” said Tom Clark, Government Affairs Chair for Spokane REALTORS®.
On initial analysis, several home builders noted several items of concern:
Census figures quantified Spokane’s housing crisis. Based on the 2020 census, we are 25,000 housing units short, meaning one-in-four Spokane families are under-housed. Since then, Spokane has continued to grow by some 7,000 people, while only adding about 1,000 new housing units.
Spokane REALTORS® will now work with the city to develop a more sensible approach to impact fees in the coming year.