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Council weighs exempting accessory dwelling units from fair-share fees amid enforcement and revenue questions
Summary
Council discussed a proposal to exempt ADUs from South Kingstown's fair-share development fee. Staff said the fee is formula-driven (includes fair-market land value) and ADU-related revenue has risen from about $11,000 (FY23) to $40,304 (FY25); council asked staff for alternatives, enforcement options for short-term rental prohibitions, and fiscal impact modeling.
The South Kingstown Town Council on Feb. 9 considered whether to exempt accessory dwelling units (ADUs) from the town's fair-share development fee. Councilmember Bergner said the intent is not to eliminate all fees but to explore whether ADUs—smaller units created on existing parcels—should pay a reduced fee or be treated differently under the fee formula.
Town staff explained the fee methodology: it is calculated using a formula set in the subdivision regulations that multiplies fair-market value of land, a land-need factor from the comprehensive plan (acres per 1,000 residents), the number of new dwelling units, and average persons per dwelling unit. That means the fee varies with land value and can increase year to year. "If every year the property values go up that fee goes up and it has no correlation to anything other than we keep making our community more and more expensive," Councilmember Bergner said.
Fiscal staff (Brian Sylvia) provided recent revenue figures tied to ADU fees: approximately $11,000 in FY23, $23,920 in FY24 and $40,304 in FY25. The current adopted fee for a 2-bedroom ADU cited in discussion was $4,277. Council discussed enforcement gaps: state law prohibits ADUs from being rented as short-term rentals but the state enforcement is limited, and the town lacks a fully reliable enforcement mechanism absent a local mirror provision or rental-registration enforcement.
Council gave staff direction to provide more modeling and options: (1) alternate fee formulas (for example, CIP-based or fixed schedules rather than fair-market value), (2) a fee category or multiplier specific to ADUs, (3) fiscal-impact scenarios showing revenue differences and effects on the town's capital projects funded by the fees, and (4) a recommendation on whether to pursue a zoning/code amendment to mirror the state's short-term rental prohibition for ADUs to create a local enforcement tool. Staff also noted required procedure: a zoning-code change would go to the planning board for an advisory opinion and then return to council for a public hearing and vote.
What happens next: staff will return with fee-model options, fiscal impact data (unit counts and revenue alignment), and proposed ordinance language/options for council direction before any formal vote.
