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Sunday, February 12, 2006

Condo Fees Scaring Off Builders

More downtown condo drama rises to the headlines... in Olympia. It's pretty much the usual debate... cities want more condos, builders want lower fees, cities want more condos and more fees.

OLYMPIA — A developer planning to build 100 condominiums downtown says city, school and development fees are too high and could kill the project.

Jim Potter of Seattle said he faces fees that could top out at $7,000 per condo unit, or $700,000 for the five-story project, envisioned for a parking lot on Columbia Street between Fourth and Fifth avenues.

City officials have made new downtown housing a top priority, and Potter's condo project is considered critical to boosting downtown's vitality.

"The big issue remaining is we have these impact fees," Potter said. "We can't make the project work at $7,000 a unit."
Some cities, such as Renton, offer the option of waiving impact fees as an incentive to attract housing developments to targeted downtown areas.

"We knew attracting condos to downtown could be a tough sell without some sort of (financial) incentive," said Alex Pietsch, Renton city administrator. The incentive has lured two condo projects, totalling [sic] about 87 units, he said.
Of course the builder is motivated by higher profits, not some altruistic desire to keep the cost of housing lower. Perhaps they're thinking ahead, knowing that while $7,000 extra tacked onto the price might not be enough to scare off buyers right now, it may well be by the time the project is finished.

(Jim Szymanski, Katherine Tam, & Rolf Boone, The Olympian, 02.10.2006)

1 comment:

biliruben said...

Wouldn't these fees be paid by the builder, not the eventual buyer of the condo?

Obviously they could try to pass the fee along in the cost of the condo, and the buyer could choose to pay the higher price or not.

I am just curious how this actually works.