Over the past 30 years, the topic of increasing or lowering impact fees has been a lot of debate among Florida County.
In collaboration with researchers at Devoe L. Moore Center, the James Madison Institute (JMI) has released a timely new report, 2024-2025, detailing the regulatory challenges faced by Floridians who have more homes and have more homes.
The study includes an analysis of impact fees, which are payments collected by local governments to offset the costs of new growth within five counties in Florida, Collier, Lee, Manatee, Sarasota and Sumter.
Common uses for impact fees include funding roads, emergency medical services, law enforcement, public parks and other amenities. These five counties represent very different approaches to the design and implementation of impact fees.
The JMI study also provides local government guidance on how to fit and refine fees to reduce the burden on builders and homeowners.
Impact fee
New developments place additional demand on public facilities. Florida housing developments are subject to a variety of government-imposed claims. These fees are required to fund public services and infrastructure, but careful fee schedule design is important.
Unstructured fees can create inequality, block development and exacerbate the affordability challenges of housing. Impact fees are payments collected by local governments to offset the costs of new growth. Common uses for impact fees include funding roads, emergency medical services, law enforcement, public parks and other amenities.
Many regions also have introduced mobility fees to support projects aimed at supporting or expanding transportation options such as walking, cycling and public transport. The impact fee ensures that the costs of expanding these facilities will be borne by new developments that create needs, not by existing residents.
Impact Fees and Taxes
Impact Fees provide local governments with a practical alternative to taxation by providing existing residents with a targeted way to fund their infrastructure without increasing taxes. As tax supplements increased following the high inflation of the 1970s, local governments sought creative ways to directly transform the costs of improving public facilities into people who create demand.
Impact fees have emerged as a promising solution. By 2019, local governments charging single family independent home impact fees raised an average of around $13,500 per home. Requiring developers to “pay their own methods” has now enabled them to fund their infrastructure sustainably while minimizing the financial burden on current taxpayers.
Despite its usefulness, there are some major limitations on impact fees.
“These fees are charged by the government for housing developments in Florida. These fees are required to fund public services and infrastructure, but careful fee schedule design is important. The study shows that the county is working to collect impact fees, suggesting that housing policy is not suitable for all approaches. – Doug Wheeler, director of George Gibbs Center for Economic Prosperity, James Madison Institute
“There is a huge gap between the demand and demand for housing units in Florida, and the state needs more homes for homeowners and tenants. This report also provides guidance for Florida cities and counties on better approaches and ways to refine the burden on builders and homeowners to the right size.” – Dr. Samuel Staley, Director of Devoe Moore Center
