EVERETT — It soon might get a little cheaper to build affordable housing in Everett.
The city is considering adopting changes to the fees it charges real estate developers, called impact fees, to provide more incentives for low-income housing.
Impact fees usually are levied on projects to raise money for improvements to roads, schools, parks and other public amenities.
David Stalheim, the city’s long-range planning manager, said staff took advantage of a review of impact fees to include a few measures targeting nonprofit developers. He helped create a similar measure when he worked for the city of Bellingham, he said.
“Part of the issue in particular with very low-income projects is the amount of dollars necessary to develop a project and keep rents affordable,” Stalheim said.
Reduced capital costs can be translated into lower rents or more units built, he said. Policies like this also help the city obtain matching funds from state and federal programs.
The savings to nonprofit developers could be significant.
The city currently imposes four impact fees on development, two of which — the transportation and school impact fees — are under consideration.
A measure scheduled to go before the City Council for a public hearing on July 27 would allow developers to get an 80 percent cut in those two fees. They’d have to demonstrate financial need and the expected benefits to the community.
The current impact fees for multifamily homes are set at $1,392 per unit for transportation and $1,092 per unit for the Everett School District. The fee in the part of Everett that’s in the Mukilteo School District is $2,952 per unit.
An 80 percent reduction in those fees means that a 60-unit low-income project such as the one the city plans to build in central Everett for the chronically homeless would see $149,040 in fees reduced to $29,808. A similar building in the Mukilteo School District would see a drop from $260,640 to $52,128.
The school districts also would have to approve any waiver of the impact fees they collect. The same 60-unit building in the Everett district would trigger $82,224 in fees, for example, if the school district did not also approve the waiver.
Eligible projects are those that provide housing for people or families whose income is less than 50 percent of the area average. For a two-person household in 2016, that’s defined as $36,150 or less in annual income, with maximum monthly rent of $791 for a studio and $847 for a one-bedroom unit.
That’s stricter than the statewide limit of 80 percent of average income, and thus is targeted toward the poorest of the poor.
“This is the income segment of the population that the private market has a very difficult time filling,” said Mark Smith, the executive director of the Housing Consortium of Everett and Snohomish County.
“Ideally, this type of impact fee waiver would be adopted countywide,” Smith said.
He said other things local municipalities can do to create more incentives for low-income housing include reducing parking requirements, speeding up the permit process and increasing the number of apartments that could be built downtown.
Those ideas area included in the Puget Sound Regional Council’s “Complete Housing Toolkit” web page that outlines suggested strategies and policy options.
Smith said he hoped the next step would be a countywide housing levy.
“There simply aren’t enough resources to build enough housing that’s needed,” he said.
The county’s 2014 “Housing Characteristics and Needs Report” indicated about 21,400 more units will be needed countywide by 2035 to target those earning 50 percent of the average income or below. Everett’s share is 5,600 units.
Stalheim said he estimates the city would only see about 50 new units of affordable housing built per year. That’s because of the small number of nonprofit developers and housing authorities targeting those markets.
Most of that would come from redevelopment of existing properties already zoned for multifamily use, because there isn’t a lot of vacant land in Everett.
But tweaking impact fees is just one step the city can take now to make it easier on developers. The city staff might find more as they review the code.
“It’s just one of those things trying to increase the supply of housing for very low incomes and including incentives to make that happen,” Stalheim said.
Chris Winters: 425-374-4165; cwinters@heraldnet.com. Twitter: @Chris_At_Herald.
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