Idaho Falls council debates new impact-fee method, torn over unfinished basements and housing equity

The Idaho Falls City Council spent more than an hour on March 30 debating a proposed 2026 development impact fee study and companion ordinance that would change how the city calculates residential impact fees.

The draft plan, presented by Director Alexander, consolidates the 10 previous residential fee categories into three square-footage bands (under 1,500; 1,500–2,999; 3,000+), updates maximum supportable fees and moves the city to assess 100% of the supportable fee for fire, police, parks and transportation. “The goal for it to be a one‑time fee,” Director Alexander told the council while explaining the consultant’s approach and the March 6 updates to the packet.

Why it matters: staff and the consultant said square footage better aligns fee levels with estimated service demand, but several council members and the impact-fee advisory committee said the change could sharply raise fees for many single-family households. Councilors pressed staff for side‑by‑side comparisons of the new square‑foot approach versus the previous per‑door (per dwelling unit) method to judge the distributional effects.

The unfinished-basement question became the central point of contention. The advisory committee’s draft recommendation recorded that members did not support including unfinished basements in square footage; committee chair TJ Donaldstead told the council the committee had focused on the equity implications of counting unfinished space. Council discussion noted that about 86% of local homes have finished basements, and members argued about how much of a fiscal or affordability impact counting unfinished basements would produce. Some councilors said unfinished basements often become finished later, raising enforcement concerns; staff pointed to building-code and inspection timing as complicating factors.

Affordable housing language: the draft ordinance removes an affordable-housing exemption that council directed to be taken out of the ordinance; staff said the advisory committee had raised enforcement concerns about ensuring long‑term affordability when a waiver was granted. Staff also cautioned that city enforcement tools for maintaining affordability are limited and that some federal mechanisms (such as HUD restrictions) carry their own long-term covenants.

Numbers discussed: staff highlighted figure 6 in the draft study (page 13), which shows example maximum supportable fees at 100%: about $3,109 for dwellings under 1,500 sq ft, $4,902 for 1,500–2,999 sq ft, and $6,460 for 3,000+ sq ft; the current single‑family fee at 75% was cited at roughly $5,273. Staff and councilors noted that percentage increases vary strongly by category and that the total capital need (the overall "pie") does not change — only how the cost is distributed among types of development.

Next steps: staff scheduled a planning-commission briefing for April 7 and a public hearing on April 23 that will include the study, capital improvement plan and the draft ordinance; staff proposed a tentative implementation date of June 1 if council adopts the ordinance. Council asked staff to provide clearer recitals and to reword language that implied the advisory committee had recommended all of the changes; several councilors also asked staff to prepare a side‑by‑side comparison showing fiscal impacts under both the square‑foot and per‑door methods before final action.

The council did not vote to adopt the ordinance at the March 30 work session; the item will return after planning‑commission review and public hearing.