Tacoma officials outline proposed transportation impact fees, cite affordability reductions and district-based rates

Tacoma staff and consultants briefed a city-council committee on a proposed transportation impact fee (TIF) program intended to help pay for 42 priority transportation capital projects and to limit how much growth shifts costs to existing residents.

The proposal would divide Tacoma into six fee districts, set per-person-trip rates that vary by district, and translate those trip rates into fees by development type. Staff said the modeling produced a citywide average cost of about $4,820 per PM peak-hour trip and that, when translated to single-family homes, fees would range roughly from $7,100 in Southeast Tacoma to about $1,600 in Northeast Tacoma; staff said the citywide average for a single-family unit in the model is approximately $5,900.

City consultant Kendra Braylen of Farr & Pears said the work narrowed an earlier project list and aimed to avoid large differences in rates between districts. "We modeled the eligibility of 42 capital projects in the program to identify TIF rates for each of the six districts," Braylen said. "The highest rates are in Southeast Tacoma, North Tacoma and South Tacoma. The lowest rates are in Northeast Tacoma." She added that the modeling considered who travels on projects — whether trips originate in or outside Tacoma — when determining eligibility.

Why it matters: transportation impact fees are intended to generate a predictable revenue source dedicated to capacity and capital investments, staff said. Jennifer Cammersell, interim division manager for Transportation and Public Works, told the committee the fees were proposed to help accommodate anticipated regional growth, citing a regional planning figure that Tacoma needs to accommodate roughly 60,000 new housing units and 94,000 new jobs by 2050.

Staff stressed multiple mechanisms to limit impacts on housing costs. Braylen and staff described statutory reductions and discretionary exemptions: state law requires a 50% reduction for multifamily tax-exempt projects near high-frequency transit and mandates a 50% reduction for accessory dwelling units. Staff also proposed an 80% reduction for units that meet affordable-housing criteria (80% or below area median income) and said other reductions could be written into code depending on council direction.

The presentation noted how the TIF interacts with existing developer obligations. Cammersell said developments would still be responsible for frontage and off-site improvements required to serve that specific development, but those improvements can be credited against an impact fee. "Improvements that they do make as part of frontage improvements can go towards a credit to that impact fee itself," she said.

Council members pressed staff on several points: Council Member Bushnell asked whether larger jurisdictions use single or multiple districts; staff replied that many peer cities use a single district but that, in larger and geographically diverse cities like Tacoma, districts better satisfy legal and practical tests. City Attorney Steve Victor told the committee a 2024 federal court case reinforced the need to show a nexus and proportionality between a property’s impacts and the fee charged, and that districting is a modern way to meet that test.

Several members asked for clearer, comparable examples showing how TIFs layer on top of existing off-site improvement costs. Council Member Hines said he wanted examples that compare typical developer frontage or off-site costs with the modeled TIF so the council could better evaluate combined impacts on development economics.

Timing and next steps: staff told the committee they expect to continue stakeholder outreach this fall and aim for full City Council consideration in September or October, with an ordinance potentially effective in the first or second quarter of the following year if adopted. Cammersell said the council may choose a later effective date if it wants more outreach or education before fees go into effect.

The briefing was informational; no ordinance or motion was before the committee at the meeting.

Ending: Staff said they will return with additional outreach results, a fee schedule and proposed code language to allow individualized assessments and credits. The committee recommended broader comparison charts to other jurisdictions and additional examples of how impact fees and frontage/off-site improvements combine for typical projects.