designing an impact fee schedule, many localities apply the same fee
rates throughout the entire jurisdiction. However, denser parts of a
city or county often have better-developed infrastructure than areas on
the fringe. When infrastructure availability is uneven across a
jurisdiction, some local governments choose to sub-divide the
jurisdiction into smaller "service areas" with fees within each service
area varying depending on existing infrastructure capacity. These
jurisdictions charge lower impact fees in sub-areas requiring fewer
infrastructure improvements to accommodate new growth. This tiered fee
schedule not only facilitates the development of more affordable homes
but also helps to discourage development in fringe areas that leads to
increased sprawl. |
Officials in Phoenix, Arizona, for example, have divided the city into eight "feeless" areas and six areas where impact fees are charged. "Feeless" areas are those in which existing public facilities
Photo courtesy of Arizona Department of Housing
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Adjust fees based on existing infrastructure and service area
In some areas the existing infrastructure already has adequate capacity to accommodate new homes. Lowering or eliminating impact fees in such neighborhoods helps preserve affordability and may create an extra incentive for affordable infill development.
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Adopt a proportionate impact fee schedule
In contrast to a flat, per-unit fee structure, proportionate impact fees reflect variations in unit size, location and other features that have been shown to influence demand for services.
Allow fee reductions or waivers
Full or partial impact fee waivers help preserve the affordability of new homes. Some communities find alternative funding sources to offset these losses and ensure that public services infrastructure keeps pace with new development.
Allow impact fees to be paid on a deferred basis
By allowing payment of impact fees to be deferred until the end stages of the development process or paid over a period of years following occupancy, communities can help to reduce housing and development costs without affecting the level of services provided.
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