Development Exactions as Growth Management and Local Infrastructure Finance Tools

Development exactions, or impact fees, have exploded in popularity over the past 20 years or so. Impact fees provide an often politically palatable alternative means of financing the infrastructure needs generated by new growth. In addition, impact fees can improve the concurrency between development and the availability of local services, through altering the pace and/or pattern of growth. Nevertheless, some equity concerns remain with respect to the effect impact fees can have on housing affordability for the young and the poor. Despite these concerns, the use of impact fees can be expected to expand in the future, with greater attention to incorporating social exactions into impact fee systems.