NAHB's State-by-State Impact Fee Map

The idea is simple: As new homes and neighborhoods are built, they create demand for public facilities. Impact or development fees imposed by local governments on new residential development help to fund public infrastructure and services like roads, schools, sewers and parks. Proponents argue that impact fees ensure growth “pays for itself.”

While the intent may seem reasonable, in practice impact fees raise difficult questions about housing affordability, fairness and local government accountability.

Unlike property taxes, which are spread across all households in a community, impact fees are front-loaded onto new construction. That cost ultimately gets passed down to the home buyer or renter, increasing the price of housing at a time when housing costs are already a strain for many families.

Impact fees are meant to fund specific infrastructure needs tied to new growth. Yet in many cases, the nexus between the fee and the actual improvement can be murky. It is not always clear if funds are being used to support growth or are simply filling budget gaps. And jurisdictions that become too reliant on impact fees may face financial crisis when growth slows during a downturn.

The challenges associated with growth have become flash-point issues in many cities, towns, and counties nationwide. Local policymakers are struggling with the question of how best to provide and pay for infrastructure and services needed to sustain growth in their communities.

At the same time, a funding crisis has pushed many local governments to rely on impact fees as a means of funding public infrastructure. In some states, impact fee rules are applied uniformly across all jurisdictions; in others, local governments have considerable flexibility. In addition, certain states restrict their use, and some prohibit them altogether.

To help builders and developers understand the rules regarding impact fees in the states in which they operate, NAHB has developed a new state-by-state map of impact fee enabling statutes.

This resource is part of NAHB’s broader effort to shed light on the regulatory barriers that shape housing affordability and supply. It gives builders, developers, policymakers, and housing advocates a clearer picture of where and how these fees are authorized across the country.

The state-by state impact fee map is the latest of many resources to help make sense of impact fee rules and other regulations that affect land use. NAHB’s Impact Fee Toolkit is another resource, with case studies and ideas about effective alternatives to impact fees.

For those looking for a broader range of information about residential development, NAHB’s Land Use 101 Toolkit is an excellent resource on policies and potential reforms that could improve housing affordability.

As local governments find it increasingly difficult to bridge the gap between the demands of growth and faltering streams of public revenue, effective funding mechanisms will become ever more important. The tools suggested by NAHB can make a difference.