Impact Fees

The Issue

Some states allow local governments to utilize impact fees as a onetime cost for residential and commercial developers to initially compensate and offset the cost of local government to provide infrastructure needs and basic services, such as emergency services, public safety, water and waste water treatment, traffic signals, and public schools. Local governments will assess different variables based on the impact of a project on the community in determining appropriate levels for impact fees. In addition to property taxes, local governments are increasingly under pressure to raise impact fees because of declining federal and state resources.

Position

NAIOP members are an invaluable resource to local leaders in establishing fair and equitable impact fees. Local governments should seek input from all interested and affected parties in determining fiscally sound and responsible solutions to the challenges within their communities.

Status

Thirty-four pieces of legislation were or are currently being considered by state legislatures. To view current legislative activity within your state, visit NAIOP's state legislative monitoring service. (Members Only. You will need to log in using your member number and password to obtain the password for this service.)

Talking Points

• Prior to establishing or altering impact fees, it is important for local governments to seek input from all stakeholders.
• Impact fees must be fair and just and should not unnecessarily burden or favor a particular sector.
• High impact fees may detrimentally affect economic growth and cause cities and counties to become less competitive with neighboring communities.
• Impact fees are unreliable sources of funding because they do not take into consideration economic downturns or cycles.

• Impact Fees – Bad Policy, Real Estate Building Industry Coalition Issue Summary
• Impactfees.com is a Web site provided as a public service by Duncan Associates, one of the nation’s leading impact fee consulting firms.
• Practical Issues in Adopting Local Impact Fees by Jerry Kolo and Todd J. Dicker State and Local Government Review Vol. 25, No. 3 (Fall 1993): 197-206 Reprinted by permission of the authors and the Carl Vinson Institute of Government, University of Georgia
• Development Impact Fee: A Primer by Carmen Carrión and Lawrence W. Libby
• Paying for prosperity: impact fees and job growth, (The Brookings Institution, June 2003).

Contact:
Toby Burke
Senior Director of State and Local Affairs
(703) 904-7100 ext. 116