Thursday, October 1, 2026
The Olympia Finance Committee recommended a new impact fee structure that would scale charges based on the livable square footage of new housing units.
During a presentation at a committee meeting on Monday, May 18, John Ghilarducci, of consultant FCS Group, discussed the change in methodology, which is intended to comply with a 2023 state law requiring cities to scale impact fees for housing units.
“The schedule shall reflect the proportionate impact of new housing units … based on the square footage, number of bedrooms, or trips generated in the housing unit, in order to produce a proportionally lower impact fee for smaller housing units,” said Ghilarducci in quoting Revised Code of Washington 82.02.060.
Impact fees are one-time charges imposed on new development to help pay for capital facilities needed to serve growth. Under state of Washington law, impact fees may be collected for streets, parks, schools and fire protection facilities.
Olympia’s current park impact fee system charges flat rates based on housing type, with the standard single-family home fee set at $6,995 regardless of home size.
Under the proposed methodology, the city would instead charge approximately $3.92 per livable square foot of residential space.
Consultants arrived at the $3.92 per-square-foot rate by dividing the city’s average park impact fee per home of $6,535 by Olympia’s average dwelling size of 1,666 square feet.
According to Ghilarducci, the calculation was based on an analysis of Olympia’s existing housing stock, occupancy levels and average home sizes. He said the city’s average dwelling unit contains 1,666 livable square feet and houses an average of 2.05 occupants.
Consultants then calculated a blended average park impact fee of about $6,535 per dwelling unit, which was divided by the citywide average square footage to arrive at the proposed square-foot rate.
“We have good data that shows the correlation between dwelling unit square footage and the number of occupants on average,” said Ghilarducci, adding more occupants generally means greater park use.
The proposal also sets minimum and maximum fees based on typical occupancy patterns.
Homes around 813 square feet, which consultants said usually house one person, would pay the minimum fee of about $3,188.
Meanwhile, homes larger than 3,500 square feet would pay the maximum fee of about $13,720.
The proposal also incorporates existing state requirements that limit accessory dwelling unit impact fees to no more than half the fee charged for the primary residence.
“The fees, the scaling that we show you is intended to be revenue neutral, so (the) idea is that it will generate the same amount of revenues as your existing fee schedule would,” Ghilarducci said.
According to a staff report, the new methodology is “designed to fairly fund park infrastructure while reducing the cost burden on smaller-sized dwelling units, to support community needs and housing affordability.”
The city provides an 80 percent discount on park impact fees on dwelling units that meet affordable housing criteria.
Committee members focused the discussion on how the new structure would affect different housing types.
Finance Committee Chair Clark Gilman, who represents the Olympia City Council on the committee, noted smaller homes would generally see reduced fees, while larger homes would see increases.
“We are talking between $3,000 and $12,000 on a half million dollar construction. (The) changes are not profound," he said.
Director of Parks Planning & Maintenance Laura Keehan said the city plans to use “livable square footage” already reported on building permit applications, excluding garages and accessory structures.
Keehan said jurisdictions must update methodologies by June 30 to remain in compliance with the 2023 state law.
The committee’s recommendation will move forward to the full city council for further consideration.
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TheVirtualOne
If housing affordability is truly something that Olympia wants to prioritize, perhaps they should consider eliminating fees like this that make it more difficult to purchase a home. If parks are the reason for this fee, maybe the city should consider a different approach to funding the parks. For example, charging park user fees is one possible solution that’s being used in other areas of the country.
Wednesday, May 20 Report this
gordixie
“ … The city’s average dwelling unit contains 1,666 livable square feet and houses an average of 2.05 occupants”
That’s a lot of space for not many people! Meanwhile we have multi-generational families living in motels for months on end as a direct result of the grossly overpriced housing market… This isn’t an ‘unfortunate circumstance’, this is the result of putting property values before people.
Wednesday, May 20 Report this
36098501
Given that impact fees make up roughly less than 1% of the City budget revenues, I would like to see every budget line item receive the same amount of thoughtful scrutiny, and media coverage.
While these impact fees have a small impact on the City budget, they have a huge impact on the pace of housing development, high housing costs and affordability for everyone, every year, forever.
While I appreciate there is still a generation of vocal passed City leaders in the community that worked hard to increase taxes, modify zoning and pursued this "growth pays for growth" strategy back in the 80's, 90's and early 2000's, it ultimately led to where basic economics said it would - constrained supply and affordability challenges to support it. The predictable result has been higher housing costs, rising rents, constrained supply, and worsening affordability for working households. This created an incredible increase in home equity for those people, but now housing in Olympia isn't attainable for many (maybe becoming most) of the people who work in our community.
An average home being built incurs $50,000 in permit fees and impact costs, costs for offsite improvements and likely another $50,000 in State sales tax. Those costs are not absorbed by developers out of charity. They are passed directly to home buyers and renters. That is not ideology, or a misreading of some biased, purpose selected, studies. It is basic market economics.
Beyond the rigorous studies at impactfees.com, independent economists across the political spectrum, from Edward Glaeser at Harvard to UCLA’s Michael Manville, consistently show that excessive fees and exclusionary zoning raise housing costs and suppress supply. So, there are strong arguments on both sides of this issue to consider.
Why are school impact fees increasing when local schools actually need new families and students to come into the community to use the infrastructure that has already been built?
Tax money is flying around everywhere in Olympia. It may not be ending up in the buckets where the City wants it, but it is flowing out of local taxpayers pockets at an unsustainable rate.
Intercity Transit - Started the year with $250,000,000 (that is millions) in their cash account.
Children's Museum - $25,000,000 in additional funding yet admission rates remain at $20 a person
Homeless - No idea, because there isn't a summary of all the programs and non-profits receiving funding for this purpose
Jungle - $250,000 to hire a consultant and to cut down 60 trees after residents complained
Downtown - $40,000 on a consultant to examine why commercial property in downtown isn't leasing
Scholarship - $100,000 to start a scholarship fund
The list goes on.
This creates an endless search for more taxes to support the City leaders claim are needed to support the basics of City functions. Olympia even has a 9% tax on utilities that is a basic necessity that most industry thought leaders agree should be untaxed like food, prescriptions, medical visits and housing. It hurts most those in our community that can least afford it.
https://www.slideserve.com/neviah/olympia-s-parks-and-sidewalks-tax-leaving-butt-prints-in-the-sands-of-time
Local governments are experiencing costs going up faster than inflation. True, but taxes can't sustainably go up faster than wage inflation otherwise our community falls further and further behind financially. This requires hard decisions and priorities as to where and how City money gets used.
Before I lose everyone's attention. It is common for local governments to blame the 1% Cap on Property Tax growth as another challenge to budgets. This HAS NOT been a constraining factor on budgets. There is a 1% Cap on EXISTING properties, but any new construction or development increases this substantially - like beyond inflation since our construction growth in Thurston County has been 2-4% going back probably a decade.
In totality, the Community is paying 3-5% more in property taxes each year. The critical problem arises when new construction declines or goes away. Then, there will in fact be stagnant growth in revenues that will be problematic for everyone.
The City has more than its share of unintended consequences from what were supposedly well thought out and data supported decisions. But good intentions alone are not enough if the overall system they are supporting is not leading to measurable improvement for the broader community.
Thursday, May 21 Report this