The Cost of Fees

The fees collected by local governments vary from one jurisdiction to the next, as does the price for each fee.

An estimate by the Washington Chapter of the American Planning Association (APAWA)found that government officials add as much as 17 percent to the price of a typical home through land use regulations. To use our area as an example, this would account for $51,000 of the roughly average $300,000 home. A different study by the University of Washington shows that since the adoption of the GMA (Growth Management Act), as much as 50 percent of the price of a home is attributable to land use regulations.

Even $68,000 imposed by government officials is enough to price many working class families out of the housing market.

A study prepared by the Department of Construction Management at the University of Washington in 2008 shows that policymakers collected more than $1.9 billion in state sales tax and an additional $337.5 million in Business and Occupation taxes from the construction industry. Additionally, construction companies paid sales taxes to local governments of more than $440 million.

Many of the laws used to regulate the construction industry are needed to provide safety or serve the public interest. However, as the data shows, local officials often impose construction fees when they do not need to, in an effort to collect more in taxes. These taxes and extra regulations have a strong effect of unnecessarily increasing the cost of construction in our state.

As stat and local officials continue to ignore or downplay their role in adding to the cost of construction, they put Washington at a marked competitive disadvantage compared to the business climate in other states.

If policy makers are serious about helping economic recovery, they must examine unnecessary fees and remove the regulatory barriers that increase costs to taxpayers and drive up the cost of living for all of us.