Urban environmentalists—that is, pro-housing groups and transit advocates—have been correctly pointing out a serious shortcoming of environmental impact statements: Environmental review has been commandeered by slow-growthers and anti-housing groups to thwart green transit projects and even modest density, such as backyard cottages.
Can we please look at the bigger picture? Adding density not only translates into a better return on infrastructure investments, such as new transit, by improving efficiency and adding riders, but it also reins in sprawl and its accompanying high-carbon commutes. Framing new housing along these lines makes one wonder why we don’t do environmental benefits statements for new development.
Unfortunately, as Erica reported on Monday, the city council is preparing to weaponize the notion of impacts yet again, amending the city’s comprehensive plan to queue up new impact fees on development. Proponents of impact fees say they would fund the new transportation infrastructure needed to accommodate new housing. The populist idea, which unites the council’s right flank (sponsor Alex Pedersen) and left flank (socialist Kshama Sawant) over their shared reactionary utopianism, is a see-through ploy to slow development—also known as housing. Developers—who you might think were manufacturing opioids, not new housing stock, given the blanket animosity they inspire—already pay sales taxes, real estate excise taxes, and Mandatory Affordable Housing fees. In fact, Pedersen’s proposal could cost developers up to four times as much as the annual property taxes on new development, according to a potential fee schedule introduced at a recent council hearing on the comprehensive plan amendment.
Instead of prescribing impact fees on new housing, the council should tax the impact of non-development by authorizing a fee on property owners who live in the vast tracts of our city, 75 percent of Seattle’s developable land, where prohibitive zoning forbids apartments. The city’s current development ban has put inflationary pressure on housing, fueling the affordable housing crisis and creating a disproportionate impact on renters and potential first-time buyers. Meanwhile, homeowner wealth grows. Between 2012 and 2022, the median cost of a house in Seattle rose from $420,000 to $1 million. During the same period, according to data from Zillow, median rents in Seattle rose from around $1,250 in 2012 to $2,350 in 2022.
Critics of new development like to point out that brand-new housing is never affordable to low- and middle-income people. But they seem to miss the fact that the developments they’re criticizing are being built now, under Seattle’s current zoning regulations—not in the up-zoned dystopia that exists in their minds. In other words: It’s the current rules against more density that are raising the price of housing, not some pro-development free-for-all.
Making new housing even more expensive by charging an impact fee for transportation (when we’re already investing in transit through several other streams) is a regressive canard, not a fair policy. Pedersen argued that impact fees could allow the city to lower the next transportation levy, reducing property taxes, but as Erica correctly pointed out, it would simultaneously harm renters by making the cost of new housing more expensive; a majority of the city, around 55 percent, rents.
The pro-housing advocacy group Sightline sent a letter to Mayor Bruce Harrell and the council last week that warned about the regressive effects of existing impact fees in Oregon, where they’re called System Development Charges. Noting that scarce housing markets are likely to make impact fees “fall on renters and new homebuyers,” Sightline cited research that concluded: “Homebuyers and renters in tight housing markets likely bear a greater share of SDC costs than landowners.”
An impact fee on non-development—as opposed to a tax on development—makes sense because you can see the harsh impact of Seattle’s restrictive, status quo zoning laws every day: Gentrification, rising rents, and development that’s clustered along busy, polluted arterial streets.
The Oregon data also concluded that fees kill development (rather than raising any money from it). Sightline’s cautionary letter to Mayor Harrell and the council goes on to argue that impact fees put a disproportionate burden on affordable housing. In Oregon, they wrote, “smaller entry-level homes, lower-cost middle housing and apartments, and communities with weaker markets are disproportionately affected by SDCs. High-end single-family detached housing is generally impacted least.”
Conversely, an impact fee on non-development—as opposed to a tax on development—makes sense because you can see the harsh impact of Seattle’s restrictive, status quo zoning every day: Rising rents; gentrification; development clustered along busy, polluted arterials (about the only place where developers can build dense housing). 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. 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.
The council is holding its public hearing on their impact fee proposal on November 7. I agree they should pass an impact fee, but not one that exacerbates our affordable housing crisis. The council should take up the impacts of our current zoning system—the one that’s responsible for forcing people to flee the city’s overpriced housing market—and they should propose an impact fee on the deleterious impact of Seattle’s longstanding, NIMBY prohibition on building homes.