Fees on New Development - Definition & Meaning

Fees on new development, also known as development impact fees or impact charges, are charges imposed by local governments or municipalities on developers and builders to help offset the costs associated with the increased demand for public services and infrastructure resulting from new construction projects.

Key points about fees on new development include:

  • Purpose: These fees are intended to fund the expansion or enhancement of public facilities and services that will be required to accommodate the needs of the additional residents or businesses in the area due to the new development.
  • Types of Fees: Fees on new development can cover a wide range of services and infrastructure, including schools, roads, parks, water and sewer systems, emergency services, and more.
  • Calculation: The calculation of these fees often takes into account factors such as the size and type of development, its expected impact on public services, and the cost of providing necessary infrastructure.
  • Legislation: The authority to impose and regulate development impact fees is typically granted by state and local laws and regulations.
  • Public Benefit: The funds collected from these fees are intended to benefit the community as a whole by ensuring that new development contributes to the cost of necessary public services and infrastructure.
In the context of education, fees on new development may be allocated to fund the construction or expansion of schools to accommodate the increased student population resulting from residential development in the area.

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