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Impact Fee Basics
Supreme Court Rules that Legislation Does Not Protect Improper Impact Fees (National Association of Home Builders, Apr. 12, 2024)
“Following a unanimous decision handed down by the U.S. Supreme Court today [Sheetz v. El Dorado County], California homeowners, builders and developers may now challenge improper local impact fees for housing development even if the fees are authorized by legislation. The decision is a major victory for the home owner involved in the case as well as home builders and developers, especially in California. NAHB and the California Building Industry Association (CBIA) submitted two amicus briefs in the case supporting the homeowner.”
State Impact Fee Enabling Actspdf (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.
Private Transfer Fees: A Rule by the Federal Housing Finance Agency (Federal Register, Mar. 16, 2012)
This is the final rule issued by the Federal Housing Finance Agency (FHFA) to “restrict the regulated entities—the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks—from dealing in mortgages on properties encumbered by certain types of private transfer fee covenants and in certain related securities.”
Development Impact Fees: A Primerpdf (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 Supplypdf (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.”
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.
Research Reports
2019 National Impact Fee Surveypdf (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 Decisionspdf (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 Handbookpdf (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 Updatepdf (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.”
Impact Fees & Housing Affordability: A Guide for Practitionerspdf (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
eBooks
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)
Managing the Complexities of Real Estate Development (eBook)
Missing Middle Housing (eBook)
Sustainable Residential Development: Planning and Design for Green Neighborhoods (eBook)
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
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The inclusion of links on this page 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 page 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.
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