OLYMPIA…When it comes to assessing school impact fees onto new home buyers, some school districts make the honor roll. Others need to go to detention. The Building Industry Association of Washington (BIAW) recently launched a new study about how school districts levy impact fees due to their considerable impact on housing affordability. Find out who made the grade.

“Impact fees are just one more way to restrict accessible affordable new homes in Washington,” said Greg Lane, BIAW Executive Vice President. “Imposing school impact fees already unfairly burdens new construction with the entire cost of increased school enrollments, but some districts compound the problem.

“That’s because they improperly assess these fees on new construction even when there isn’t actual enrollment growth,” he said. “Those districts are failing their communities.”

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Top of the class

“Some school districts recognize that the law requires impact fees to only pay for new increased growth for new capacity and use their power to levy impact fees judiciously or not at all,” Lane said. “Those districts receive an “A” in our book.”

Those districts include:

• Federal Way School District
• Monroe School District
• Sumner-Bonney Lake School District

“Local governments should be allowing and encouraging development because new homes and economic development increase the tax base for all local services, including schools,” Lane said.

“Instead of driving up costs to construct new homes by imposing outrageous school impact fees, school districts and government officials should work on reducing the overall cost of construction so new homes AND school capacity are less expensive for everyone,” he said.

One-third of districts need remedial math

A full one-third of the school districts in the study received Ds or Fs, mostly because they continued to collect impact fees despite declining school enrollments, driving up the cost for new homes without any clear need for increased capacity.

Two districts received an F-. That’s because they imposed impact fees without any clear growth rationale. Those districts are:

• Evergreen School District
• Issaquah School District
  

Proposals to improve fairness

Given the appearance of widespread misalignment between impact fees and actual enrollment growth BIAW suggests eliminating school impact fees. Absent that, they propose to implement accountability measures such as:

• Consistent, transparent, and public reporting
• Standardized fee calculations
• Clear limits on what percentage of school expansion can be funded by impact fees
• Strict deadlines for using collected funds
• Proper tracking to ensure fees are spent only on authorized purposes

About school impact fees

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Local governments and school districts levy impact fees on new development projects to help cover the costs of providing public services and infrastructure necessary to support the growth that comes with that development.

When builders bring a new housing development to market, the local school district may need to accommodate additional students. School districts can use impact fees for capital projects related to that growth, such as constructing a new school building, or expanding existing facilities to increase classroom capacity.

However, they can’t use these fees for operational expenses, such as paying salaries for teachers or staff, purchasing educational materials or covering ongoing maintenance costs for existing schools.  

‍School impact fees often represent the largest impact fees imposed on new residential developments. These fees increase the cost of new homes, compounding the affordability crisis in Washington state.

“BIAW supports strong public schools and recognizes their vital role in our communities,” Lane said. “However, imposing school impact fees on new development is neither effective nor equitable. That’s because districts may only use school impact fees for specific uses and they do not provide stable or long-term funding to accommodate growth.‍

“We believe that financial support for public schools should come from more equitable, sustainable, and predictable funding sources, rather than placing an additional burden on new housing developments,” he said.

Read the report to learn more