Housing Affordability and Infrastructure Fees: A Direct Link

Spokane is facing a housing affordability crisis with home prices and rental rates increasing at unprecedented levels.

One of the leading influencers on the cost of housing in a community is the pricing of new homes coming onto the market. When new home costs are high, prices across an entire market–even for older, existing homes–face pressure to remain high as well.

That’s why it’s essential for elected leaders and governments to be careful when adding to the cost of building new homes through fees, including those charged for infrastructure.

Building a home is not cheap, and government fees at the state and local level in Spokane have added over $100,000 to the final purchase price for homebuyers above and beyond the cost to purchase land and the materials and labor needed to build homes.

Here’s how some of those fees break down at the state level:

• $71,500 have been added to the cost of a home due to zoning regulations in Washington State.

• $20,000+ have also been added to the final cost of a home due to the implementation of the new Washington State Energy Code.

Here’s how some of those fees break down at the local level:

• Locally in Spokane, general facility charges and impact fees are adding another $20,000+ to the cost of a new home.

Fees are needed to balance the strain new development puts on existing infrastructure, but builders have few options outside of passing these charges down to renters and homebuyers–keeping prices high for community members all across the Spokane area.

When considering how to fund infrastructure, there are a number of other revenue sources such as sales taxes, utility fees, bonds, and other options that can help to keep pressure off the cost of housing.

In order to prevent exacerbating the housing affordability crisis facing Spokane, it’s important to look at all the options available for funding infrastructure. Through collaboration and community dialogue, we can find the right balance of revenue sources to achieve our goals, including solving the housing crisis rather than making it worse.