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On Monday March 13, the Spokane City Council passed a series of fee increases on new housing construction, including a water connection fee increase on multi-family units from $18,000 to $470,000. There was also a 300% increase for residential water connections and an almost 250% increase in transportation fees with estimates showing the impact fee could be as high as $7,500 per home.
Now it seems, due to public outrage at the massive fee increases, the council has, at least temporarily, reversed its position and reduced the amount of the increases until early 2024.
In a housing crisis, increasing development fees will not increase housing availability and reduce costs. The cost of increased fees will be passed onto the home buyer as higher home prices. Developers will be less incentivized to cover the cost of the fees during construction of the home and housing starts will decline as a result.
Homes in Spokane are still selling above list price 23.4% of the time in a market that is still rated somewhat competitive, despite cooling in the last year, according to the Redfin real estate website. Adding the additional fees to new construction will reverse that trend.
Spokane City Council needs to completely repeal the onerous fee increases on housing construction and not just delay the implementation, to reduce the cost of housing in Spokane.
For WPC’s recommendations on how to increase housing affordability and availability, without increasing fees and taxes, click here.
