Many Sequim real estate professionals say the trend is unmistakable: Those planning to build a new home in the Sequim area are choosing to build in the county rather than within city limits.
They say they also know the reason: The fees charged by the city make building a home here too expensive.
Others, including Mayor Ken Hays, say they recognize the fees aren’t pleasant but are necessary to pay for the infrastructure improvements that growth requires.
Councilor Laura Dubois says raising the fees is the responsible thing to do: “Previous councils did not set the rates at the recommended rates because they said it would discourage growth. Well, we got the growth and the city could not keep up with the needed infrastructure improvements.”
Former Sequim mayor Walt Schubert has another perspective, saying, “I think it’s easy for those who are there now (on the council) to say they need to raise fees because of what we did. But we didn’t raise them because they didn’t need to be raised.”
Schubert said when he joined the council in 2000, many in the community were concerned about the opening of the new Highway 101 bypass, believing it would decimate the city’s economy. Soon after they were empaneled, the new councilors voted to cut in half the “general fees,” which Schubert said were “very high.” As an example, he provided the story of one Sequim businessman who hoped to open a laundromat. “He gave up,” Schubert said, when he was faced with fees of more than $100,000.
Schubert said he helped form, then served on, a council utility-rate committee that helped hold down fees on water and sewer services. “We were most concerned about those who couldn’t afford them,” he said.
Schubert admitted the town soon “had too much growth,” which he defined as “growth that outstrips the codes, rules and regulations you have in place.
“We ended up with developments that probably would have been a little different,” he said. But overall, “we did just fine,” he said.
Brody Broker, a broker with Jace The Real Estate Company, said the movement to build in the county is easily explainable: “When all of the additional (city) fees cost more than half as much as people make in a year, you’re going to see very little new building.”
Broker said the movement to the county is unwelcome for a number of reasons, not least the greater ecological impact that results. He noted those who build a home in the county ordinarily purchase a larger lot and use more water.
The use of septic tanks is also problematic. “That increases nitrates in the ground water,” Broker said.
Broker noted the city currently has unused capacity in its sewer plant.
Broker also noted that “people in the county use city services — streets, parking, parks — but they don’t city pay taxes.”
He said many in city government have argued that permits for new construction in the city are down due to the recession. There’s some truth in that, he said, but “the breakdown from county to city should be the same.”
He noted the ratio of county permit applications for new construction to city applications is much greater now than in the past.
Records provided by Clallam County and the City of Sequim confirm Broker’s assertion. In 2005, 2006 and 2007, county permits for new home construction outpaced those issued in Sequim about 2 to 1. In 2008, 2009 and 2010, the county issued six to 10 times the number of permits issued by the City of Sequim.
“This move to the county can’t go on,” Broker said. “You’ve got to be friendly to development.” He said the city council currently lacks the expertise that may be required to make these decisions. “As far as land use goes there is very little experience. (As a result), the unintended consequences are bigger than intended consequences.”
“Our city council is well-intentioned and they care,” Broker said. “They just don’t understand the consequences of their actions. It’s a little bit shocking — they’re comparing us to cities that have a median income four times what we have here.”
Mayor Ken Hays said he’s “sympathetic to the concerns the Realtors have regarding the city’s efforts to better regulate the cost impacts to the city due to growth. As an architect I share their concerns and feel the same pains our collective community of professionals and trades people all suffer in adapting to the new economy.”
Hays said he welcomes growth, but “as a councilor I struggle with these issues of costs to the city and the community in order to support growth and development because the issues are real, not an attempt to stifle growth. I know there is a perception that growth pays for itself through additional taxes, etc., but truthfully they do not, especially on the residential side.”
Hays said it’s still possible, and useful, to continue talking about the issues.
“We as a community share the cost impacts because we must grow and evolve to be healthy and all of the community benefits from positive growth that adds to and preserves our quality of life.
“The real issue is how to accomplish a fair sharing of costs; how to prevent the existing residents from paying for more than they benefit from (through increases in taxes and rates) and to prevent the unintended effect of stifling our free market economy, thereby retarding healthy growth.”
Fees continue to climb
Greg McCarry, a Sequim developer and builder of custom homes, agreed the city has made it much more difficult to build new developments within city limits. He said recent changes to the membership of the council mean “this town shifted from a bias toward growth — to against growth.”
McCarry also noted the council’s purpose was “to raise revenues.” But, he said, with the decline in new starts, particularly with a weak national and local economy, “they’re shooting themselves in the foot.”
As an example, McCarry pointed out that the city has in recent months found itself unable to fund through fees the bond payments due on $8 million in improvements to the sewer system. That was the original plan, he said, but with fee revenues down the city has passed the bill along to everyone.
“The point,” he said, “is the city needs to raise fees when the economy is better.”
McCarry said the notion that people will retire and build here despite the high fees is incorrect. He noted that many of those planning to retire compare state income tax rates, the cost of living and the cost of building a prospective home.
McCarry charted the Sequim changes, saying in May 2006 the permit fees in Sequim to build a 2,000 square foot home were $7,113. Now the fees would top $22,000 — and are continuing to climb.
“At the same time,” he said, home values in Sequim have “dropped approximately 30 percent.”
Hays said he wants to continue the conversation.
“I don’t pretend to have all the answers but I do bring to the table a broad range of experience and expertise and would embrace a community dialogue with Realtors, builders and the residents to find solutions that work for everyone.
“If we do not find a way together to sustain the virtues we value as a community, the industry that I and the Realtors make a living in will wither.”