OLYMPIA — An effort by a powerful builders group to spur construction of homes in Snohomish and King counties is running into opposition from cities and out of time in the Legislature.
The Master Builders Association of King and Snohomish Counties wants state law changed to allow developers to wait to pay required fees for parks, roads and schools until after selling a new home rather than when permits to build it are obtained.
A bill trying this out in Snohomish and King counties as a pilot program easily cleared the House of Representatives last month.
But it is languishing in the Senate and in danger of dying Friday. That’s fine with opponents who have stepped up the pressure on senators who must pass the bill in some form by 5 p.m. Friday when it would expire.
“From a city perspective, this is not a good venture,” said Marysville Mayor Dennis Kendall.
“The reason we collect those fees is to be sure work is done prior to the completion of the houses. If we don’t get that money upfront, we’ll have to pay. I don’t have the money to, say, put in sidewalks before houses are built so they won’t get done.”
Builders say they don’t have the money either.
Today a builder is required to fork out hundreds and maybe thousands of dollars in fees per home before a spade of dirt is turned.
In the recession, as credit tightened, many developers can’t afford the fees and don’t build, said Scott Hildebrand, director of public policy for the association. By pushing back the payments due date, development activity could accelerate and bring cities the benefit of jobs and tax revenues that are not now occurring, he said.
“At its heart, it really is an economic development bill,” he said. “People will have to do things a little differently, but I don’t think it will be a big burden.”
Sen. Jean Berkey, D-Everett, helped advance the legislation into the Senate Rules Committee where it has sat the past week.
“Construction has grounded to a halt. To me, this was an opportunity where we can try to help the construction industry,” she said.
Leaders of Everett, Marysville and Arlington, a handful of school districts, and the Association of Washington Cities are staunchly opposed. They need those fees to make improvements such as paving roads, installing stoplights, creating parks and making school improvements.
The amount at stake varies as fees charged by Snohomish County and each city charges differ.
Everett, for example, levies only a road fee of $900 for a single-family dwelling. In Marysville there is a traffic fee of $6,300 and parks fee of $1,200. The city also collects money on behalf of three school districts. Last year, Marysville garnered a total of $1.5 million in fees, two-thirds of which went to the schools.
Kendall noted many cities don’t have the money and would have to wait months for receipt of the fees.
Civic leaders also worry about the potential difficulty of tracking down the money if it is not paid.
The intent of the bill is for the fees to be recorded as a lien or covenant on a title and paid at the time of closing. Cities and counties aren’t typically notified of escrow closures and would need to monitor the transactions to make sure they get their money.
“Our opposition is largely based on the fact that we do not have the ability to track these covenants on a parcel by parcel basis,” Arlington assistant city administrator Kristin Banfield wrote in a letter to state legislators.
“This legislation would require us to modify our permitting system at a significant cost, which given our current budget constraints would be difficult to fund,” she wrote.
City officials said they could become collection agents and wind up in court to extract payment from delinquent builders, title companies or home buyers, whoever is identified as the responsible party in the bill.
State law already allows cities and counties do this if they choose, and the city of Sammamish has been trying it out. Hildebrand said it’s been going well in that city.
Rep. Dan Kristiansen, R-Monroe, who voted against the bill, said there’s not been enough activity in Sammamish to determine if this change in the law is merited.
“Why would we put a mandate out there if we don’t know if it works,” he said. “If you do it wrong, it’s going to be a problem.”
The proposed legislation is House Bill 3067.
Reporter Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com
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