Impact fees are charges assessed by local governments against new development projects that attempt to recover the cost incurred by government in providing the public facilities required to serve the new development. Impact fees are only used to fund facilities, such as roads, schools, and parks, that are directly associated with the new development. They may be used to pay the proportionate share of the cost of public facilities that benefit the new development; however, impact fees cannot be used to correct existing deficiencies in public facilities. In Washington, impact fees are authorized for those jurisdictions planning under the Growth Management Act (RCW 82.02.050 - .110), as part of “voluntary agreements” under RCW 82.02.020, and as mitigation for impacts under the State Environmental Policy Act (SEPA - Ch. 43.21C RCW). GMA impact fees are only authorized for: public streets and roads; publicly owned parks, open space, and recreation facilities; school facilities; and fire protection facilities in jurisdictions that are not part of a fire district. Setting fee schedules for impact fees is a complex process typically involving rate studies; generally, impact fees do not recover the full cost of a new facility since these fees must be directly and proportionately related to impacts associated with new development. The MRSC webpage: Types of Impact Fees and Other Sources of Public Funding Authorized by Washington Statutes, provides more information about these alternative types of impact fees. For a one-page summary of the Impact Fee concept, see Impact Fees in Plain English.
In 2009, the Legislature adopted SB 5580, Chapter 263, Laws of 2009, which extends the time period for expenditure of school impact fees to 10 years. In 2011, the Legislature adopted ESHB 1478, Chapter 353, Laws of 2011, which extends the time period for expenditure of all types of GMA impact fees to 10 years. Impact fees may be held for longer than 10 years if the governing body of a local government identifies in written findings "extraordinary and compelling reasons" that justify the longer period.
HB 1080, Chapter 86, Laws of 2010, amends the definition of “public facilities” for which impact fees may be collected to include all fire protection facilities, rather than only fire protection facilities in jurisdictions that are not part of a fire district. As a result, after June 10, 2010, local jurisdictions may collect impact fees to be used for fire protection facilities in a fire district.
This impact fees page includes links to materials addressing technical and legal aspects of impact fees, sample ordinances, and fee schedules.
State Statutes and Administrative Regulations
Three statutes provide the primary authority for impact fees imposed by cities and counties:
Washington Administrative Code:
- James v. Kitsap County, 154 Wn.2d 574 (2005)
The imposition of impact fees as a condition of building permit issuance is a "land use decision" subject to the Land Use Petition Act (LUPA), and thus must be challenged within 21 days.
- Pavlina v. City of Vancouver, 122 Wn. App. 520 (2004) - Assessment of development impact fees
Even though preliminary plat approval occurred before an impact fee ordinance was adopted, the fees could be imposed when the developer applied for a building permit. Impact fees are not an additional condition of approval. That the developer’s plan previously received preliminary approval does not preclude imposition of impact fees when a building permit is sought.
- Nolte v. City of Olympia, 96 Wn. App. 944 (1999)
A city may not impose impact fees on projects outside of its borders. However, if a city enters into a utility extension agreement (UEA) based on the promise to pay impact fees that are later found to be invalid, the city is relieved of its duty to perform under the UEA.
- Vintage Construction Co. v. Bothell, 83 Wn. App. 605 (1996)
A land developer sought to recover fees paid to a city in lieu of dedication of land that were imposed on the developer as a condition of subdivision approval. The court held that the city's failure to determine, in a site-specific manner, the value of the land the developer could have been required to dedicate rendered the fees in lieu of dedication invalid. This case provides a clarification of two earlier cases concerning impact fees: Henderson Homes v. Bothell, 124 Wn.2d 240 (1994), and Trimen Development Co. v. King County, 124 Wn.2d 261 (1994)
- Wellington River Hollow v. King County, 113 Wn. App. 574 (2002) - Impact Fees
It is not unconstitutional for jurisdictions within a school district have discretion to impose school impact fees on new developments, even though the amount of fees for comparable units will differ from one jurisdiction to another within the same school district.
- West Coast, Inc. v. Snohomish County, 104 Wn. App. 735 (2000) - Preliminary Plats/Modification/Impact Fees
A condition of preliminary plat approval, in this case school impact fees, is tantamount to a contractual obligation that is binding on the applicant absent extraordinary circumstances justifying a failure to perform.
- City of Olympia v. Drebick, 156 Wn.2d 289 (2006) - Calculation of development fees under GMA
The state supreme court upheld the city's calculation of transportation impact fees imposed under GMA, reversing a decision by the court of appeals (119 Wn. App. 774 (2004)). The GMA impact fee statutes permit local governments to base impact fees on area-wide infrastructure improvements reasonably related and beneficial to the particular development seeking approval. This standard is broader than the standard under SEPA or the Local Transportation Act. The city was not required to calculate the impact fee by making individualized assessments of the Drebick development's direct impact on each improvement planned in a service area. The city's method of calculating transportation impact fees complied with the plain language of the GMA impact fee statutes.
- New Castle Invs. v. City of LaCenter, 98 Wn. App.224 (1999) - Transportation Impact Fee Ordinance
A city's transportation impact fee ordinance is not subject to the vesting statute for subdivision applications, RCW 58.17.033, because transportation impact fees do not fall within the definition of "land use control ordinances" under that statute. Consequently, the city's impact fee can be applied to a proposed development even though the application for preliminary plat approval was completed prior to the effective date for the city's ordinance.
Growth Management Hearings Board Decisions
Most Growth Management Hearings Board decisions address the fact that impact fees imposed under Chapter 82.02 RCW are not within the board’s jurisdiction. As per the James v. Kitsap County Supreme Court case cited above, impact fee matters are land use decisions in the development permit arena and are subject to the Land Use Petition Act (LUPA). There are a few hearings board cases that tangentially touch on the impact fee issue, primarily in the central Puget Sound area.
To find growth management hearings board cases that address this and related issues, the boards have a Case and Decision Search page with a keyword search capacity that may be of help. The board also posts digests that summarize key holdings of cases and that have a keyword index of major topics including “impact fees.” Note that the boards have now been consolidated into a single board and, as of July 1, 2010, all hearingss board cases are in the same digest, rather than separate digests by region.
Ordinances Authorizing Impact Fees for Multiple Capital Facilities
- Clark County
- Clark County Code Ch. 40.610 - Development Impact Fees - General Provisions
- Clark County Code Ch. 40.620 - Calculation of Development Impact Fees - Traffic, parks, and schools
- Clark County Code Ch. 40.630 - Procedures
- Duvall Municipal Code Ch. 14.58 - Impact Fee Assessments - Parks, roads, and schools
- Enumclaw Municipal Code Ch. 19.24 - Impact Fees - Transportation, parks, fire, and schools
- Gig Harbor Municipal Code Ch. 19.12 - Impact Fees - Roads, parks and schools
- Kitsap County Code Ch. 4.110 - Impact Fees (see especially §14.110.200) – Schools, roads, and parks
- Olympia Municipal Code Title 15 - Impact Fees - Parks, schools, and transportation
- Pierce County Title 4A - Impact Fees - Parks, schools, and traffic
- Stanwood Municipal Code Ch. 17.151 - Impact Fees - Public Facilities - Transportation, parks, and fire
- Tumwater Municipal Code Ch. 3.50 - Impact Fees - Fire, transportation, and schools
School Impact Fee Ordinances
- Bainbridge Island Municipal Code Ch. 15.28 - Development Impact on, and Impact Fee Schedule for, Public School Facilities
- Gig Harbor Ordinance No. 963 () - School Impact Fees, passed 07/2004
- Issaquah Municipal Code Ch. 3.63 - School Impact Fees
- King County Code Ch. 21A.43 () - Impact Fees (Schools)
- Mukilteo Municipal Code Ch. 3.100 () - School Impact Fees
- Snohomish County Ordinance No. 03-033 (), passed 04/09/2003
- Whatcom County Code Ch. 20.75 - School Facility Impact Fees
Transportation Impact Fee Ordinances
- Bellevue Municipal Code Ch. 22.16 - Transportation Improvement Program
- Bellingham Municipal Code Ch. 19.06 - Transportation Impact Fees - See especially Sec. 19.06.040(E)
- Issaquah Municipal Code Ch. 3.71 - Transportation Impact Fees
- King County Code Ch. 14.75 - Mitigation Payment System
- Kirkland Municipal Code Ch. 27.04 - Transportation Impact Fees
- Snohomish County Code Ch. 30.66B - Concurrency and Road Impact Mitigation - Scroll to chapter
- Spokane Municipal Code Ch. 17D.075 - Transportation Impact Fees
Park and Recreation Impact Fee Ordinances
- Anacortes Municipal Code Ch. 3.92 - Parks and Recreation Impact Fees
- Bothell Municipal Code Ch. 21.08 - Park Impact Fees
- Mukilteo Municipal Code Ch. 3.105 - Park Impact Mitigation
- Sequim Municipal Code Title 22, Division II. Parks and Recreation Impact Fees
- Tumwater Municipal Code Ch. 3.52 - Park Impact Fee Ordinance
Fire Impact Fee Ordinances
- Auburn Municipal Code Ch. 19.06 - Fire Impact Fees
- Dupont Municipal Code Ch. 26.05 - Fire Impact Fees
- Issaquah Municipal Code Ch. 3.73 - Fire Protection Impact Fees
- Impact Fees in Plain English - MRSC's one page explanation of the concept
- Development Impact Fees: A Primer (), by Carmen Carrión and Lawrence W. Libby, 2004, Ohio State University
- Exactions, Impact Fees and Other Land Development Conditions, by David L. Callies, Revolutionary ideas in planning : proceedings of the APA 1998 national planning conference, April 4-8, 1998, Boston Massachusetts, American Planning Association (Available through MRSC Library Loan)
- Impact Fees: Practical Guide for Calculation and Implementation (), Dennis H. Ross, Scott Ian Thorpe, Revenue and Costs Specialists website
- Paying For Prosperity: Impact Fees and Job Growth, The Brookings Institution, Arthur C. Nelson and Mitch Moody, June 2003
Types of Impact Fees and Other Sources of Public Facility Funding Authorized by Washington Statutes
The legislature has adopted a number of statutes that provide alternatives for the financing of public facilities to serve existing and/or new development. For a brief overview of statutes authorizing several different types of impact fees, and of selected sources of public facility financing other than impact fees, see the MRSC webpage Types of Impact Fees and Other Sources of Public Facility Funding Authorized by Washington Statutes.
Impact Fee Payment Deferral Programs
Local jurisdictions have taken different approaches regarding when to collect impact fees. Most jurisdictions in Washington do not issue building permits, or in other cases, development permits, until impact fees have been paid. A developer then has a major incentive to pay up, since the developer may not proceed with the project until fees are paid. However, impact fees collected at these earlier stages represent a significant upfront expense, which a developer must pay before the project is generating any revenues. In order to deal with this issue, and, more recently, to assist a building construction industry in recessionary times, a number of jurisdictions have adopted new ordinances allowing deferment of impact fee payment. For more information on this topic, see the MRSC webpage Impact Fee Payment Deferral Programs.
Impact Fee Studies and Surveys
- AWC Tax and User Fee Survey, 2012 - Includes executive summary of information and on GMA impact fees, in addition to land use fees, park and recreation fees, and utility collected by Washington cities. (See Land Use Fees - Part II.) Full survey data is available to AWC members or for purchase from AWC
- Comparison of 2013 TIF Base Rates in Western WA Including Average and Median TIF Rates(), data compiled by Chris Comeau, AICP, Bellingham Public Works
- School District Impact Fees in Washington (), Triad Associates, 2006
- 2011 National Impact Fee Survey (), by Clancy Mullen, Duncan Associates
- Parks and Recreational Facilities Impact Fee Rate Study (), Sequim, 2008
- Rate Study for Impact Fees for Parks and Recreational Facilities (), Issaquah, 2008
- Rate Study for Transportation Impact Fees, Kent, 05/2010
- Rate Study for Impact Fees for Transportation, Parks and Fire Protection (), Renton, 08/26/2011
- School Impact Fees - Special Study, Report No. 2000-06, King County Auditor's Office, 2000 - Study that evaluated the reasonableness of school districts' construction and land cost estimates and the effectiveness of King County's evaluation procedure
- MRSC Inquiries - Impact Fees - See MRSC responses to frequently asked questions about Impact Fees
- Impactfees.com, an online impact fees resource provided by Duncan Associates - Comprehensive site on impact fees developed by national impact fee consultants; includes news, state and local links, surveys, publications, and case law