Research has found that development exactions are capitalized into the price of new housing. As the price of new housing increases, one would expect to see a price rise in existing housing as well, albeit lagged to some extent. This paper presents the results of an empirical study designed to measure how much impact fees affect the price of existing, single-family dwellings. Data for this study were obtained from county property appraiser files provided by the Florida Department of Revenue. The data represent 1,055 new and 3,135 existing home sales, respectively, in Dunedin, Florida, and 7,292 existing home sales in Clearwater, Florida, from 1971-1982. On June 3, 1974, the city of Dunedin began assessing impact fees of $1,150 against all new, single-family construction. The methodology used in this paper examines the price differential of new relative to existing housing and frnds that the difference disappeared after six years.apid population growth has strained the infrastructure capacity of many com-R munities. Congestion on the highways is the most visible evidence, but schools, parks, sewer and water treatment, and police and fire services are also affected. The existing tax base at current tax rates may not be sufficient to meet the costs of required infrastructure expansion. Since the expansion of such public services is primarily necessitated by new housing and commercial development, communities are increasingly using impact fees levied against construction as a way to raiserevenues.' These impact fees represent an attempt to charge those who benefit with a portion of the cost of providing services.Depending on the nature of housing supply and demand in a community, impact fees may be paid directly by developers, passed forward to home buyers, or passed backward to landowners (Weitz 1985). Further, by substituting for property taxes or through improved infrastructure, impact fee benefits may be capitalized into existing housing prices as well. A price effect also may filter through to the existing home market, creating windfall gains for existing homeowners (Ellickson 1982, Huffman et al. 1988) and exacerbating housing affordability problems, as a result of new home price increases. Thus, while new homes represent only a small porCharles J.