Pros, cons of impact fees

North Idaho cities use impact fees to help keep up with growth.

Here’s a look at what some cities charge in impact fees and how the money is used.

Coeur d’Alene

Last fiscal year the city of Coeur d’Alene collected $1,216,711.59 in total impact fees. That is from both residential and commercial development for parks, police, fire and circulation (roads). 

“We’re really proud of the way we use the money,” said Troy Tymesen, city administrator.

Impact fees, as allowed by law, are designed to generate funds from new developments to pay for their share of the capital costs for planned improvements to the city’s roads, parks, police department and fire department.

In 1996 the city approved the implementation of impact fees, as specific legislation was approved. These fees are assessed to ensure that growth pays for itself.

An example of the city’s impact fees and where the money is designated:

Single-family and multi-family units — $755.97, parks; $70.31, police; $138, fire.

A person who has a background in the building industry, and asked that their name not be published, said there are pros and cons to impact fees.

Yes, they help pay for growth, but the downside is they increase the cost of housing because the fees are passed on to the consumer.

“All it’s going to do is continue to increase the price of housing,” he said.

Comparing today to about two years ago, he said it costs twice as much to build a house. Lumber, drywall, insulation and plumbing have all increased. Impact fees add to that cost.

That’s a problem in an area like North Idaho, which needs more affordable housing for blue-collar workers.

“The cost of housing in Kootenai County is astronomically higher than it was a short time ago,” he said.

He also said while the area is seeing strong growth, and impact fees are generating funds, when building slows down, so do the fees, which can leave entities counting on them scrambling for ways to make up the difference. That's what happened in 2008 when the market took a dive and the economy tanked.

Impact fees "ultimately increase the price of housing," he said.

Rathdrum

It has two types, circulation impact fees and parks impact fees. They are collected on new construction projects only and are one-time fees.

Circulation fees — $1,483.80 per residence per year. Multiply this by 180 homes and this gives the rough annual revenue of $267,084. 

Fees are calculated based on “trips,” meaning the average number of times those living in a home will leave and take a trip out. For residences, the average is considered 10 trips per day and each one is charged an impact fee of $148.38. Multiply that by 10 and that’s where the $1,483.80 comes from. 

For nonresidential impact fees, $35.41 is charged per trip. 

These impact fees are only used for work on city streets.

The Boekel and Meyer roundabout that will be installed next year will be built using some federal funding but the 7% remaining of the cost will be paid for using city impact fees. 

Park fees — Only residential units pay park impact fees. 

They are $1,364.72 per home. They use the same standard of 180 homes to calculate the total collected for a year so that would equal $245,649.60. 

These fees are used to maintain a standard level of service which is five acres of public park land per 1000 residents. 

The funds are only used to purchase new land and develop new parks to maintain this level of service. 

Post Falls

Transportation, Parks and Recreation, public safety and multimodal impact fees are collected. The funds must be spent on capital projects that are growth related and to maintain a specified level of service. 

For Parks & Recreation impact fees the max that can be collected on a single-family home is $3,721 and $2,769 for a multi-family unit. 

Revenue collected last year in this area was $1.4 million. That standard is to maintain 6 acres of level one park land per 1,000 residents and 10 acres of level two parks per 1,000 residents. Impact fees can only be used to purchase new land and develop new parks.

For public safety impact fees, the max that can be collected per single family home is $452 and $336 for multi-family units. These fees are used to maintain the current level of public safety service and supports the police station, the vehicle maintenance facility, evidence and record storage and the communications infrastructure. 

Total collected last year for public safety was $450,000.

For street facility impact fees the maximum collectable on single family homes is $1,510, or $854 multi-family units.

Total collected last year for street facilities was $1.1 million. 

Multi-Modal impact fees are a new category and used to create bike lanes and walking paths.

Hayden

For impacts to infrastructure outside of developments, including roads and the general park system, the city collects impact fees. Sewer capitalization fees buy capacity in the sewer system. Impact fees and cap fees collected are kept in funds to be used only for those purposes.

Impact fees collected by the city of Hayden in the calendar year 2021:

Transportation: $380,202.63

Parks: $204,04

Residential Impact Fees

• Single family
• Parks impact fee: $1,414 per housing
• Transportation impact fee: $1,813 per housing unit
• Multifamily/other
• Parks impact fee: $870 per housing unit
• Transportation impact fee: $1,124 per housing unit

Nonresidential Transportation Impact Fees

• Retail/restaurant: $5.67 per square foot of floor area
• Office/institutional/other services: $1.11 per square foot of floor area
• Industrial/warehouse/flex: $.035 per square foot of floor area

Sewer Capitalization Fees

$5,244 city circulation

$5,160 Hayden Area Regional Sewer Board treatment plan

One-time connection fee — Total $10,404 residential