Impact Fees and Employment Growth

Abstract

Local jurisdictions across the country continue to adopt alternative financing options, although the effects of these remain uncertain. There are two views of impact fees: (a) an old view, that fees are a tax on development increasing prices and reducing quantity and (b) a new view, that fees provide services and reduce future taxes, thus increasing demand and prices. 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 overaggregations and lead to unintended consequences.

Restrictive Land Use Regulations and Economic Performance

“…Whether impact fees approximate the marginal cost of new development is the subject of debate (Bartik 1991; Burge and Ihlanfledt 2009; Jones 2015), although there is evidence that impact fees exceed the marginal cost of new construction (Bartik et al 1987; Fox and Neel 1987; Burge and Ihlanfledt 2009). There are few studies that examine the relationship between mitigation fees and economic development.…”

A Qualitative Content Analysis of the Developers’ Perspectives on Development Charges

“…This is because the development charge is also a part of total development costs. The increase in the development costs will increase the selling price of the development, thus, will reduce the demand for that particular development (Jones, 2015).…”

Development charges in Toronto: exploring the disconnect between planning policy and fiscal policy

“…In Toronto, development charges have increased rapidly amongst surmounting fiscal pressures for growth related capital infrastructure. Research has found that development charges put an upward pressure on housing prices (Ihlanfeldt & Shaughnessy, 2004; Ihlanfeldt & Shaughnessy, 2006;Bryant, 2017), increase the cost of existing housing, (Sishir, 2007) and reduce local economic development activities (Ihlanfeldt & Shaugnessy, 2004;Jones 2015). This paper argues that future increases to development charge rates in the City of Toronto work counterintuitive to its planning policies.The recommendations provided are based on the idea that municipalities must carefully consider the impacts of high development charges alongside planning policy objectives that they aim to achieve.…”

“…There is a large body of academic literature suggesting several negative impacts of development charges related to the incidence of the changes, and its impacts on housing affordability and local economic development. Research has found that development charges put an upward pressure on housing prices (Ihlanfeldt & Shaughnessy, 2004;Ihlanfeldt & Shaughnessy, 2006;Bryant, 2017), increase the cost of existing housing, (Sishir, 2007) and reduce local economic development activities (Ihlanfeldt & Shaugnessy, 2004;Jones 2015).…”