Analyzing Impact Fee Regulations Nationwide

The National Association of Home Builders (NAHB) has launched a series of resources aimed at shedding light on the complex issue of impact fees and their impact on housing affordability and development finance.

Impact or development fees are charges imposed by local governments on new residential development to fund public infrastructure and services. However, the connection between these fees and specific infrastructure improvements can sometimes be unclear.

To address this, the NAHB has created a state-by-state map of impact fee enabling statutes, providing clarity on where and how impact fees are authorized across the country. The map also offers information on the conditions under which these fees are imposed, as well as the opportunities or obstacles they create for housing supply.

The affordability of housing is already under serious strain, and impact fees contribute to this issue. Recognising this, the NAHB's resources aim to help members and policymakers navigate this complex issue.

The resources include the Impact Fee Toolkit, which offers information and case studies on discussing and combating impact fees. The toolkit is designed to provide practical approaches to understanding and addressing the challenges posed by impact fees.

In addition, the Land Use 101 Toolkit from NAHB includes resources on regulatory reform and housing affordability, highlighting the role of impact fees in development finance.

The NAHB's tools and guidance are designed to aid stakeholders in understanding and addressing the challenges posed by impact fees. They also raise questions about fairness and local government accountability, as funds from impact fees may not always be used to support growth, but could potentially be used to fill budget gaps.

On a global scale, the German federal government has enacted the Grundsteuer-Reformgesetz (Property Tax Reform Act), effective from January 1, 2025. This law revises the legal basis for property tax, including for new constructions, to better reflect current values and usage. The calculation considers factors like land area, land value, building age, and type of use, with local municipalities setting rates to fund public infrastructure such as roads, schools, sewage, and parks. This reform aims to ensure fairer tax burdens and provide municipalities with funds to finance public infrastructure.

In conclusion, the NAHB's resources offer a comprehensive approach to understanding the impact fees and their role in housing affordability and development finance. They provide a means for stakeholders to make informed decisions regarding impact fees and their potential impact on housing supply and affordability. By shedding light on this complex issue, the NAHB aims to contribute to a more transparent and equitable housing market.