Developers Have a Song For Government These Days

This article appeared as a guest editorial in the "Puget Sound Business Journal" on January 30th, 2009. As a former home builder Steve couldn't resist taking a poke at a few Seattle area planners.

“How do you like me now?”

So goes the chorus of an old country song, a chorus area home builders could be singing at regional city and county council meetings if they were so inclined.

In good economic times home builders are a cash cow for local governments. Development, impact and permit fees are piled on with wild abandon and wheelbarrow loads of building material sales tax flows in to government coffers.

Ironically, at the same time homebuilders are routinely vilified as despoilers of the landscape; the chief cause of traffic congestion and crowed schools.

Well, now that the fee flow has disappeared, how do local governments like homebuilders now? When times are good home builders are a convenient source of cash. While this isn’t Chicago’s “pay to play” approach to doing business the results are similar. Home builders write big checks for the right to build homes that the region needs. The costs get passed on to consumers, housing prices rise, affordability becomes a dream and governments officials wring their hands about the high cost of housing.

But that reliable source of government revenue has dried up giving officials even more cause for hand wringing.Consider some of the “voluntary” contributions that have now diappeared, in light of the housing slump.
· Sales tax on building materials.
· Impact fees for schools, roads and parks.
· Utility connection fees.
· Building permits fees.

The sad truth is that many of these charges far exceeded the actual cost of providing services to the new home communities. So when the permit applications disappeared the county and city costs did not. Thus the squeeze on government budgets.

So, how do they like the homebuilders now?

With apparent disregard for the sad state of the housing market and in spite of the shortage of affordable housing, agencies have not slowed their efforts to further raise the cost housing, once someone decides to build one.
· One Snoqualmie Valley school district just doubled their impact fee per home to $10,000.
· Regional fire marshals are pushing a plan to require fire sprinklers in all new homes at over $10,000 per home.
· Many communities are enamored with Low Impact Development (LID) a green and more expensive approach to community development. While some elements have merit the economics are being swept under rug as communities vie for the right to say, “my community is greener than your community.”
· King County is toying with requiring a “Carbon Impact Analysis” for new development. Read another way it means more delay, more studies and more cost.

This list could go on. It appears that the planners, freed from the burden of processing permits, are now devoting their efforts to the hot planning idea de jour. And when the housing market returns, and it will return, it will be accompanied by the usual municipal hand wringing about the lack of affordable housing. An optimist might hope that governments would show more respect for an industry that does so much to fill their tax coffers in good times while providing the basic housing for their citizens.

In the meantime regional homebuilders can gain some satisfaction, while dusting their unsold homes, by humming Toby Keith’s, “How Do You Like Me Now?”