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The Effect of Impact Fees on the Price of New Single-family Housing

Author

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  • Shishir Mathur

    (Department of Urban Design and Planning, University of Washington, Seattle, Washington, USA, shishir@u.washington.edu)

  • Paul Waddell

    (Evans School of Public Affairs and in the Department of Urban Design and Urban Planning, University of Washington, Seattle, Washington, USA, pwaddell@u.washington.edu)

  • Hilda Blanco

    (Department of Urban Design and Planning, University of Washington, Seattle, Washington, USA, hblareco@u.washiregtore.edu)

Abstract

This paper provides new evidence on the effects of impact fees on housing prices, using an inventory of single-family housing sale transactions in the 38 cities and towns within King County, Washington, for the period 1991-2000. Although the effect of impact fees on housing prices has been examined previously, earlier studies have been limited by methodological deficiencies. This paper examines the effect of impact fees on new housing and their differential effect on housing price based on the quality of housing, and finds that the effect of impact fees on the price of new housing is quite significant and elastic, raising new home prices by about 166 per cent of the amount of the fee. The increase is 358 per cent for the higher-quality homes and is statistically insignificant for the lower-quality homes.

Suggested Citation

  • Shishir Mathur & Paul Waddell & Hilda Blanco, 2004. "The Effect of Impact Fees on the Price of New Single-family Housing," Urban Studies, Urban Studies Journal Limited, vol. 41(7), pages 1303-1312, June.
    • Handle: RePEc:sae:urbstu:v:41:y:2004:i:7:p:1303-1312
    DOI: 10.1080/0042098042000214806
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    References listed on IDEAS

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    1. Larry D. Singell & Jane H. Lillydahl, 1990. "An Empirical Examination of the Effect of Impact Fees on the Housing Market," Land Economics, University of Wisconsin Press, vol. 66(1), pages 82-92.
    2. Brueckner, Jan K., 1997. "Infrastructure financing and urban development:: The economics of impact fees," Journal of Public Economics, Elsevier, vol. 66(3), pages 383-407, December.
    3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
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    Cited by:

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    2. Cameron K. Murray, 2016. "Developers pay developer charges," Discussion Papers Series 567, School of Economics, University of Queensland, Australia.

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