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Impact Fee Basics
Infrastructure Finance and Development Fees (National Association of Home Builders, 2022)
“Both public and private sector resources are more constrained than ever before, and the issue of how to fund infrastructure remains a significant one. In fact, it’s typically one of the first issues that comes up when developers propose new projects… The challenge and opportunity for all is to figure out how to work together to incentivize desired new projects and finance needed infrastructure as effectively, reliably and efficiently as possible without driving up housing costs in the process.”
State Impact Fee Enabling Acts (Duncan Associates, Sep. 15, 2018)
“Impact fees were pioneered by local governments in the absence of explicit state enabling legislation. Consequently, such fees were originally defended as an exercise of local government's broad "police power" to protect the health, safety and welfare of the community. The courts gradually developed guidelines for constitutionally valid impact fees, based on a "rational nexus" that must exist between the regulatory fee or exaction and the activity that is being regulated…To date, 29 states have adopted impact fee enabling legislation (for other than water and wastewater fees). These acts have tended to embody the constitutional standards that have been developed by the courts.”
This is a summary of those impact fee enabling acts, the standards for impact fees, the facilities eligible for impact fees, state planning requirements, substantive provisions and procedural provisions. It includes each state act at the end of the report.
Development Impact Fees: A Primer (Duncan Associates)
A primer that includes a definition of development impact fees, then discusses the policy considerations and legal considerations when implementing these fees, and cites examples of state legislation regarding development impact fees.
The Impacts of Impact Fees
One Reason Housing is so Expensive in California? Cities, Counties Charge Developers High Fees (LA Times, Aug. 6, 2019)
“A long-awaited study detailing how much cities and counties charge developers to build housing in California found that such costs are often hidden, vary widely across the state and have slowed growth…The report, released by the state Department of Housing and Community Development, comes as Gov. Gavin Newsom and state lawmakers continue to search for ways to lower construction costs to help remedy a shortage of available homes. The study recommends that legislators push cities and counties to make public their fees, set standards for services so that costs will be more predictable and take into account how they affect housing production.
How ‘Developer’ Became Such a Dirty Word (The New York Times, Jul. 29, 2019)
A discussion of the history of development and the impacts that development has on housing growth, shortages, and affordability.
Impact Fees in Realtion to Housing Prices and Affordable Housing Supply (University of Oklahoma, 2016)
“This Chapter is designed to provide a summary of the various theoretical and empirical investigations of the effects of impact fees over the past two decades. It is designed to synthesize the existing evidence concerning three critical market conditions: 1) residential property values, 2) residential construction rates, and 3) non-residential economic development and job growth. The Chapter concludes with a brief summary and some comments on how these findings contribute to the public debate over the use of impact fees.”
Impact Fees and Employment Growth (Economic Development Quarterly, Nov. 2015) E
“The research presented in this study, based on data from Florida counties, finds that the relationship between fees on commercial development and fees on employment differs across different categories of economic activity. The use of fees is positively related to service-sector employment growth and negatively related to manufacturing employment growth. This result suggests that different sectors realize different levels of benefits from infrastructure provided through fee revenue and that policy decisions based on total employment may suffer from over aggregations and lead to unintended consequences.”
2019 National Impact Fee Survey (Austin, TX: Duncan Associates, 2019)
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.
Location-Based Development Impact Fee Programs and New Business Location Decisions (Lincoln Institute of Land Policy, 2019)
This research “explores the effects of development impact fees on business location decisions. While research investigating the causes and consequences of impact fee programs spans four decades, surprisingly little is known about how commercial and residential impact fee programs influence the spatial distribution of new businesses. The results highlight the value of public infrastructure to the business community as well as the potential for efficiency gains from regionally coordinated impact fee programs”
Impact Fee Handbook (National Association of Home Builders, 2016)
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.
Private Transfer Fees: Proven to Fail? A White Paper Update (National Association of REALTORS®, August 2015)
“Since the original publication of this White Paper [see White Paper below], new rules have been implemented to limit the effect of PTFs—or to ban them entirely. Despite these changes, questions about the legal enforceability of PTFs are almost certain to arise from purchasers, and agents and brokers should be prepared.”
White Paper Report: Private Transfer Fees—Potential For Trouble, Problems for the Future? (National Association of REALTORS®, May 2008) — Member login required
“Private transfer fees (PTFs), also sometimes referred to as private transfer taxes, are one of the hotly debated new issues in real estate law and practice. There seems to be little middle ground when it comes to opinions about PTFs—people either love them or hate them. But just what are PTFs? How do they work, and how do they affect day- to-day real estate transactions? What is their potential impact on the future of real estate law and practice? The following discussion, based on interviews with real estate experts and research to locate the most current laws and periodical discussions, will attempt to answer these questions and more, as well as raise a few new questions that it may be far too early to answer.”
White Paper Report: Private Transfer Fees—Potential For Trouble, Problems for the Future? (National Association of REALTORS®, May 2008)
Member login required
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
eBooks & Other Resources
Buy, Rent, and Sell: How to Profit by Investing in Residential Real Estate (eBook)
The Complete Guide to Zoning: How Real Estate Owners and Developers Can Create and Preserve Property Value (eBook)
A Guide to Impact Fees and Housing Affordability (Audiobook, eBook)
Sustainable Residential Development: Planning and Design for Green Neighborhoods (eBook)
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