School Impact Fees and Housing Costs: What Washington Businesses Should Know

School Impact Fees and Housing Costs: What Washington Businesses Should Know

School impact fees can affect whether new housing is developed in Washington. A recent report from the Building Industry Association of Washington examined how school districts utilize these fees and evaluated districts based on enrollment trends, fee levels, and access to capital facilities plans. The main point of the report is that school impact fees should be linked to actual student growth, clear facility needs, and transparent public planning.

School impact fees are levied on new developments to help pay for school facilities needed because of growth. They can support the construction of new school buildings or the addition of classrooms, but cannot cover regular operating expenses like salaries, supplies, or maintenance. This is important because impact fees are separate from general school funding. They are intended to address growth-related capital needs.

The report states that these fees can raise housing costs during a time when Washington already struggles with affordability. For builders, impact fees increase the cost of constructing new homes. For buyers and renters, these costs may be passed on through higher prices. For employers, this is important because housing affordability affects workforce recruitment and retention, as well as employees' ability to live near their jobs.

The report evaluates districts based on enrollment changes, fee amounts, and the availability of a recent, easily accessible Capital Facilities Plan. It expresses concerns that some districts continue to charge impact fees even when enrollment remains steady or declines. According to the report, this raises questions about whether certain fees are truly related to actual growth.

For growing communities, including parts of the Tri-Cities, the challenge is finding a balance. Schools need enough space to support new families, but housing must remain affordable for workers and employers. If fees are too high, unclear, or not tied to actual growth, they can prevent the construction of the housing communities needed.

The report suggests increased transparency, improved tracking, consistent fee calculations, and clearer guidelines for assigning impact fees. The key point for business leaders is that school funding, housing costs, and workforce needs are closely connected. A more effective system should support school capacity while ensuring housing development remains fair, predictable, and affordable.

Access the full report: Making the Grade: Grading school impact fees