What impact do impact fees typically have on development?

Impact fees play a significant role in the development process by specifically funding necessary infrastructure improvements that support new construction. When developers are required to pay these fees, the funds are directed towards enhancing or expanding infrastructure such as roads, sewer systems, and other public facilities that are essential for accommodating the additional demand created by new developments. This mechanism ensures that the costs of growth are borne by those who contribute to it, rather than being placed solely on existing residents through general taxation.

While some might argue that impact fees could discourage new construction by increasing the costs for developers, their primary function is to provide a financial resource for infrastructure, thereby potentially facilitating rather than hindering development in the long run. Additionally, the assertion that they would eliminate the need for permits is inaccurate, as impact fees are often a part of the overall permit process but do not replace the necessity for permits. Similarly, while property taxes may be affected by the overall economic conditions of a community, the direct relationship between impact fees and property taxes is not straightforward.