What is the purpose of impact fees?

The purpose of impact fees is to fund infrastructure required to support new developments. When a new property is developed, it often places additional demands on public services and infrastructure, such as roads, schools, utilities, and parks. Impact fees are designed to collect funds from developers to cover the capital costs of these necessary improvements that will benefit the new developments. This ensures that local governments have the resources needed to expand or upgrade infrastructure to accommodate the increased population and activity resulting from new projects.

While other options address aspects related to property development and municipal services, they do not align with the specific purpose that impact fees serve. For example, taxing existing properties does not directly tie to new developments' infrastructure needs. Similarly, penalizing developers for delays or covering routine maintenance costs does not focus on the costs generated by new developments, which is at the core of why impact fees exist. Thus, funding infrastructure from new developments accurately captures the intended role of impact fees within capital planning and development financing.