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Impact fees


We were a rural community on the edge of the Dallas-Ft Worth metro area. We are growing at a tremendous pace. The City is thinking about implementing impact fees for new developments. Does anyone have examples of these fees, how they impacted growth, what the actual fees are based on? Any comments would be appreciated. Thanks.


Impact fees should be based on a specific methodology tailored to fit your jurisdiction and its capital improvements program. I don't believe there is a "one size fits all" option for you. I would recommend you consider using a consultant that has expertise in the area.

There is a really good book you can get through APA called "A Practitioner's Guide to Development Impact Fees" that explains an appropriate methodology, legal issues and some market ramifications. It's definitely a good start.

Good luck.

Joe Iliff

Reformed City Planner
Texas has complicated laws on impact fees, but the concept is fairly simple: Development should pay for the impact it has on the city, like the water it uses, the sewer systems, the roads it adds traffic to, etc.

My community has had impact fees for several years, and while I've heard complaints (too high, even though we only charge 50% of the state max), I've never heard anyone say they wouldn't come to my town because of them.

Richmond Jake

You can't fight in here. This is the War Room!
City moves forward with $16,000 condo impact fee

Remuneration for each new unit built in greater downtown area would fund utility, infrastructure

By Valerie Lovett
News Herald Writer 747-5078

PANAMA CITY, FL - For the first time in months, Panama City Mayor Lauren DeGeorge was not on the losing end of a 4-1 vote regarding downtown development. The Panama City Commission agreed Tuesday night, with Commissioner John Pilcher dissenting, to move ahead with an ordinance that would tack on an impact fee of about $16,000 to every new condominium unit built within the greater downtown area.

The greater downtown area includes the Downtown and Downtown North community redevelopment areas. The new fee is intended to fund utility and road improvements made necessary by future development and based on an infrastructure study completed last summer. The city needs to make some $11 million in infrastructure improvements to serve several hundred planned condominium units as they come online, according to City Manager Ken Hammons.

The city would front the money for the improvements, to be completed in phases as the condominiums build out over time. But the fee could all but halt development, said attorney Bob Hughes, who represents developers of several projects planned for downtown. “This is kind of a surprise to me, and if the commission were to pass those numbers today, I daresay it might not only stop any high-rise development; it might stop mid-rise and low-rise development, too,” Hughes said.

Condominium owners may be asked to pay for more than their fair share of the improvements, Hughes said, urging the commission to hold a workshop to further discuss the fee. Several developers are about to apply for building permits, and dawdling on a decision would be a bad idea, Hammons said. He added that the fee should not come as a surprise to anyone, considering initial public discussions last summer put the figure closer to $19,000 per unit.

“We’re going to have multifamily housing units that we’ve got to service, and somebody’s got to pay the bill,” Hammons said. For the buyers of many of the million dollar condos, the fee may not be too big of a burden to bear. But for Sean Newberry, a downtown property owner with plans to build 16 “affordable” townhouses off Harrison Avenue, the impact fee hurts to the tune of $256,000, effectively killing his project. The city can revisit the affordable housing dilemma later, Hammons said. “We’re looking at at least two developers nipping at our heels for development orders,” Hammons said. “In a perfect world it would be fine if we had assurances that we had time to work it out in a workshop and nobody would be in here to pull a permit when we had no fees in place. But we don’t live in a perfect world.” Hughes said the impact fee might have “huge unintended consequences.”

These are probably the highest in the Sunshine State and will really increase development pressure in the unincorporated County.