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Field Guide to Development Impact Fees

(Updated October 2013)

Impact fees, or development fees, are expenditures that developers are required to make as a precondition to approval of their projects. Impact fees are generally used to finance roads, schools, affordable housing, transit systems, and other projects and services in municipalities throughout the United States. The fees are frequently passed on by developers to purchasers in the price of a new property and, therefore, increase the cost of housing and decrease the profitability of a particular project. This Field Guide includes articles, studies, Supreme Court decisions, and other material on the debate over impact fees. (S. Hogan, Information and Web Content Specialist)


2012 National Impact Fee Survey

Image Source: 2012 National Impact Fee Survey, Duncan Associates

According to the 2012 National Impact Fee Survey by Duncan Associates, average total fees charged by jurisdictions surveyed in 2012 are $11,583 for single-family units. Excluding utility fees, the average total fee is $8,111. School impact fees, although not charged in many states, are the highest, followed by water, wastewater, road, and park impact fees. Police, fire and library fees, on the other hand, tend to be relatively low. General government facility impact fees and stormwater drainage impact fees are relatively uncommonly charged -- general government fees are not authorized in most states, and drainage fees are difficult to implement because they generally must be based on a comprehensive drainage master plan.


Impact Fee Basics

State Impact Fee Enabling Acts, (Clancy Mullen, Duncan Associates, impactfees.com, Jan. 21, 2012).

Impact Fees: Crunching the Numbers, (Tierra Grande, Oct. 2007).

Impact Fees: Paying for Progress, (Tierra Grande, July 2007).

The Impacts of Impact Fees

Promoting Sustainable Land Development Patterns Through Impact Fee Programs, (Cityscape, 2013). Q

Tax First, Ask Questions Later: Problems Predicting the Effect of President Obama's International Tax Reforms, (Stanford Journal of Law, Business & Finance, Fall 2010). Q 

The Effect of Development Impact Fees on Housing Values, (Journal of Housing Research, 2009). Q 

Determining the Real Cost of Growth and Development and Who Should Pay, (Government Finance Review, June 2009). Q 

The Efficiency of Impact Fee Financing for Commercial Infrastructure Requirements, (Jones and Snow: University of Georgia, Oct. 2009). 

Escaping the Takings Maze: Impact Fees and the Limits of the Takings Clause, (Vanderbilt Law Review, May 2009). Q 


Research Reports

2012 National Impact Fee Survey, (Austin, TX: Duncan Associates, Aug. 20, 2012). — This report summarizes the results of a detailed survey of impact fees that individual jurisdictions across the country are charging. The results of the survey reveal where impact fees are most common, how much jurisdictions in various states are charging, and the types of facilities for which fees are being charged.

Proportionate-Share Impact Fees: Supplement to the NAHB Impact Fee Handbook, 2008 Version, (National Association of Home Builders, Oct. 2009). —Evidence is presented to convince practitioners that impact fees graduated by unit size are better than flat fees.

Impact Fee Handbook, (National Association of Home Builders, 2008). — This Handbook was developed to provide homebuilders and other parties interested in impact fees a resource for exploring critical issues and to provide strategies for achieving balanced infrastructure financing solutions.

Impact Fees & Housing Affordability: A Guide for Practitioners, (U.S. Department of Housing and Urban Development, June 2008). — This Guidebook includes information that is useful to local jurisdictions that are either in the process of implementing impact fees, or considering revisions to current impact fee programs. It includes information on history, alternative financing models, state legislation, impact fee design, and case studies.

Policy Guide on Impact Fees, (American Planning Association, 1997). — Policy guide from the APA in which eight policies and several standards are discussed.


Websites & Other Resources

Infrastructure Finance & Development Fees, (National Association of Home Builders). — Visit this site for information on impact fees, infrastructure finance alternatives,impact fees & housing affordability, and impact fee legislation & case law.

ImpactFees, — Visit this site for state and local information, case law, publications, surveys, FAQs, and the latest news related to impact fees and infrastructure financing.

Development Impact Fees, (Multi-State Issue Tracker, National Association of REALTORS®) — Please click on “Access the State Issues Tracker,” then click on “Development Impact Fees” on the left for a summary of development impact fee legislation trends by state.


eBooks & Other Resources

eBooks

Buy, Rent, and Sell: How to Profit by Investing in Residential Real Estate (Adobe eBook)

The Complete Guide to Zoning: How Real Estate Owners and Developers Can Create and Preserve Property Value  (Adobe eBook)

Home Building Contractor Secrets: How to Buy Wholesale and Save $40,000 (or More) on the Construction of Your Dream Home (Adobe eBook)

Sustainable Residential Development: Planning and Design for Green Neighborhoods (Adobe eBook)

Books, Videos, Research Reports & More

The resources below are available for loan through Information Central. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800-874-6500 for assistance.

A guide to impact fees and housing affordability, (Washington, D.C.: Island Press, 2008).  NAC 1800 N33

Bargaining for development: A handbook on development agreements, annexation agreements, land development conditions, vested rights, and the provision of public facilities, (Washington, D.C.: Environmental Law Institute, 2003). 

The Guide to Real Estate: Principles and Practices, (Cincinnati, OH: South-Western/Thomson Learning, 2002). HD 1375 M36


Field Guides & More

These field guides and other resources in the Virtual Library may also be of interest:

Field Guide to Transfer of Development Rights (TDRs)

Field Guide to Zoning Laws & Ordinances

InfoCentral Blog


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The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.