The Vancouver City Council on Aug. 18 adopted two ordinances to let multifamily residential developers defer certain impact fee and system development charge (SDC) payments until they request a temporary certificate of occupancy.

Patrick Quinton, Director of Economic Prosperity and Housing, and Brian Monroe, project coordinator, presented the measures and the financial analysis. Quinton said the city coordinated with public works, parks and finance to estimate the fiscal effects. "The proposed impact fee code amendments will allow applicants to request deferral of specifically traffic and park impact fees from the time of building permit issuance to the time of temporary occupancy inspection," Monroe said. He added that school impact fees are explicitly excluded from the deferral option.

Council adopted an amendment to Vancouver Municipal Code section 20.915 to allow deferral of traffic and park impact fees and an amendment to VMC 14.04 to allow deferral of water and sewer system development charges for qualifying multifamily development. The ordinances require a signed agreement between the applicant and the city, placement of a lien on the property for the deferred amount, and give the city authority to withhold occupancy permits or pursue foreclosure for unpaid fees.

Staff estimated typical impact fee deferrals will average about 23 months and will be limited by code to no more than 36 months. For SDCs staff said the deferral period will likely be shorter — roughly nine months — because SDCs do not vest and increase annually on Jan. 1, and it is in developers’ interest to pay earlier to avoid rate increases.

Finance analysis presented to council showed a temporary shortfall in capital funds under a modeled production scenario: an estimated peak shortfall of roughly $5,500,000 in parks impact fees and about $1,700,000 in traffic impact fees roughly two years out. Staff stressed the shortfall would be temporary and that deferred fees would be collected over time; staff calculated foregone interest at roughly $500,000 as the principal ongoing cost of the program.

Planning Commission reviewed the zoning code change and unanimously recommended approval. Councilors thanked staff for the fiscal transparency. Both ordinances were moved and approved by unanimous roll call votes.

Key implementation details require applicants to sign a formal deferral agreement, accept a lien on the property, and clear deferred fees before the city will release temporary occupancy certificates.