Being in the commercial real estate business as long as I have, and being involved in the development process both as a broker and as a principal, I have had to deal with numerous municipalities on the matter of their impact fees. A layperson probably wouldn’t relate to the term "impact fees" so I thought I’d try to bring everyone up to speed on the subject.

Development impact fees have been born out of the notion that “growth should pay for itself.” Certainly that is a noble objective. If a developer wants to build a project that’s going to require a new school to be built or a fire or police station or a new sewage treatment plant, as an individual taxpayer, I don’t want to have to pay for that. Growth has impact on the existing infrastructure of a municipality.

A definition of development impact fees is “a one-time charge assessed to new development.” The objective of these charges is to raise revenue for the construction or expansion of capital facilities (like schools, fire stations, etc.) located outside the physical boundaries of the new development itself from which the new development in question will directly or indirectly benefit.