An impact fee is a fee that is imposed by a local government within the United States on a new or proposed development project to pay for all or a portion of the costs of providing public services to the new development. Impact fees are considered to be a charge on new development to help fund and pay for the construction or needed expansion of offsite capital improvements. These fees are usually implemented to help reduce the economic burden on local jurisdictions that are trying to deal with population growth within the area.
What is ‘Impact Fee’
A fee imposed on property developers by municipalities for the new infrastructure that must be built or increased due to new property development. These fees are designed to offset the impact of additional development and residents on the municipality’s infrastructure and services, which include the city’s water and sewer network, police and fire protection services, schools and libraries.
These fees can also be levied against any individual or entity where its actions create an externality within a municipality.
Explaining ‘Impact Fee’
Some U.S. states attempted to institute an impact fee on individuals who owned vehicles registered in another state, who then subsequently registered that same vehicle in their homestate. This smog impact fee was eventually overturned by the U.S. courts, who stated the fee was unconstitutional on the grounds that it unfairly discriminated against persons from other states.
- Infrastructure financing and urban development:: The economics of impact fees – www.sciencedirect.com [PDF]
- Impact fee assessment using highway cost allocation methods – trid.trb.org [PDF]
- Trends in park tourism: Economics, finance and management – www.tandfonline.com [PDF]
- Impact Fee Credits for Livable Communities Improvements – trid.trb.org [PDF]
- An empirical examination of the effect of impact fees on the housing market – www.jstor.org [PDF]
- An empirical investigation of the effects of impact fees on housing and land markets – www.sciencedirect.com [PDF]
- Promoting sustainable land development patterns through impact fee programs – www.jstor.org [PDF]
- The need for a standard state impact fee enabling act – www.tandfonline.com [PDF]