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The Incidence of Development Fees and Special Assessments

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  • Yinger, John

Abstract

This paper investigates the incidence of development fees and special assessments, popular ways to finance new public infrastructure. Development fees are often seen as a way to shift the burden of new infrastructure onto the new residents that require it. This view is only partially right. Even with mobile households, competitive housing markets, and infrastructure investments that meet a cost-benefit test, one-quarter of the burden could fall on the owners of undeveloped land. Moreover, imposing fees for infrastructure that does not benefit new residents will only increase landowners’ burden. In contrast, the above conditions ensure that the burden of special assessments falls entirely on new residents.

Suggested Citation

  • Yinger, John, 1998. "The Incidence of Development Fees and Special Assessments," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(1), pages 23-41, March.
    • Handle: RePEc:ntj:journl:v:51:y:1998:i:1:p:23-41
    DOI: 10.1086/NTJ41789309
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    References listed on IDEAS

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    1. Jonathan C. Levine, 1994. "Equity in Infrastructure Finance: When Are Impact Fees Justified?," Land Economics, University of Wisconsin Press, vol. 70(2), pages 210-222.
    2. Goodman, Allen C., 1988. "An econometric model of housing price, permanent income, tenure choice, and housing demand," Journal of Urban Economics, Elsevier, vol. 23(3), pages 327-353, May.
    3. Stover, Mark Edward, 1986. "The price elasticity of the supply of single-family detached urban housing," Journal of Urban Economics, Elsevier, vol. 20(3), pages 331-340, November.
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    Cited by:

    1. Burge, Gregory & Ihlanfeldt, Keith, 2006. "Impact fees and single-family home construction," Journal of Urban Economics, Elsevier, vol. 60(2), pages 284-306, September.
    2. Randy Bluffstone & Matt Braman & Linda Fernandez & Tom Scott & Pei‐Yi Lee, 2008. "Housing, Sprawl, And The Use Of Development Impact Fees: The Case Of The Inland Empire," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 433-447, July.
    3. Burge, Gregory, 2014. "The capitalization effects of school, residential, and commercial impact fees on undeveloped land values," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 1-13.
    4. Changhoon Jung & Chul-Young Roh & Younguck Kang, 2009. "Longitudinal Effects of Impact Fees and Special Assessments on the Level of Capital Spending, Taxes, and Long-Term Debt in American Cities," Public Finance Review, , vol. 37(5), pages 613-636, September.
    5. Lozano-Gracia, Nancy & Young, Cheryl & Lall, Somik V. & Vishwanath, Tara, 2013. "Leveraging land to enable urban transformation : lessons from global experience," Policy Research Working Paper Series 6312, The World Bank.
    6. Walls, Margaret & McConnell, Virginia, 2004. "Incentive-Based Land Use Policies and Water Quality in the Chesapeake Bay," RFF Working Paper Series dp-04-20, Resources for the Future.
    7. Xiaofang Dong & Shihe Fu & Yufei Yuan, 2013. "Impact Fees and Real Estate Prices: Evidence from 35 Chinese Cities," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 8(2), pages 207-219, June.
    8. Oleg O. Smirnov, Sergey B. Sivaev, 2024. "Routing Utility Transit Infrastructure: A Social Welfare Theory Approach," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(2), pages 341-363.
    9. John Anderson, 2005. "Taxes and Fees as Forms of Land Use Regulation," The Journal of Real Estate Finance and Economics, Springer, vol. 31(4), pages 413-427, December.
    10. Adam T. Jones, 2015. "Impact Fees and Employment Growth," Economic Development Quarterly, , vol. 29(4), pages 341-346, November.
    11. J. Peter Clinch & Eoin O'Neill, 2010. "Designing Development Planning Charges: Settlement Patterns, Cost Recovery and Public Facilities," Urban Studies, Urban Studies Journal Limited, vol. 47(10), pages 2149-2171, September.
    12. Ihlanfeldt, Keith R. & Shaughnessy, Timothy M., 2004. "An empirical investigation of the effects of impact fees on housing and land markets," Regional Science and Urban Economics, Elsevier, vol. 34(6), pages 639-661, November.
    13. Adam Found, 2021. "Development Charges and Housing Affordability: A False Dichotomy?," IMFG Papers 56, University of Toronto, Institute on Municipal Finance and Governance.
    14. Burge, Gregory & Ihlanfeldt, Keith, 2009. "Development impact fees and employment," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 54-62, January.
    15. Adam Jones, 2015. "Fees and Firms: An Empirical Examination of the Relationship Between Development Impact Fees and Firms," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 261-269, June.
    16. repec:wyi:journl:002181 is not listed on IDEAS
    17. Ellen Hanak, 2008. "Is Water Policy Limiting Residential Growth? Evidence from California," Land Economics, University of Wisconsin Press, vol. 84(1), pages 31-50.

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