Impact fees for off-site road improvements: Guidelines for evaluating the practicality of the approach and for designing local programs

Impact fees are rapidly becoming the most widely considered nontraditional financing technique for off-site road improvements in the United States. A review of the literature related to such fees suggests that a variety of factors need to be considered in evaluating the appropriateness of the approach for any particular community. These factors include: the legal authority of the jurisdiction; the type of improvement for which funding is being sought; the local political palatability of the approach; the competitiveness of development within the local economy; and potential social implications of such fees. Once it has been determined that impact fees are both legally permissible and in the best overall interest of a given community, other issues need to be considered in the design of an effective local program. These issues relate to the area to be covered by the program, the method to be used in calculating payments, how the program will be administered, and to legal constraints imposed on communities by the rational nexus text. While impact fees are no panacea, in situations where they are appropriate, a well designed impact fee program can provide significant sums of revenue with which to address local transportation needs.