What Determines Public Support for Graduated Development Impact Fees?

• DOI: 10.1177/0160323X17716745
• Published date: 01 March 2017
• Date: 01 March 2017
• Subject Matter: Research Notes

Research Note
State and Local Government Review
2017, Vol. 49(1) 15-26
What Determines Public
ª The Author(s) 2017
Reprints and permission:
Support for Graduated
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DOI: 10.1177/0160323X17716745
Development Impact Fees?
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Abigail M. York1, Kevin Kane2, Christopher M. Clark3,
Lauren E. Gentile1, Amber Wutich1 and Sharon L. Harlan4
Abstract
The development impact fee is one growth management tool that is often adopted to reduce
externalities associated with development on the urban fringe. But it is also used as a revenue
generator that offsets property taxes. While graduated impact fees are a potential means to reduce
sprawling development, it is unclear which public constituencies favor their adoption. Using an
adjacent category logit model, there is limited evidence for exclusion based on race or class and,
surprisingly, homeownership is not a major determinant of support. The model results indicate
differences in policy preferences among longtime Phoenix residents, newcomers, city dwellers, and
sub/exurbanites, which may suggest a desire to maintain the status quo and shift the burden of new
development to developers and homebuyers. This article contributes to local government literature
through an empirical examination of how sociodemographic factors drive public support for
graduated development impact fees.
Keywords
growth management, impact fees, planning, public support
Development impact fees are a widely used
Development impact fees provide a means
growth management policy based on the idea
to both generate revenue to support residential
that developers and homebuyers do not bear the
growth and reduce resistance to new develop-
full cost of development. Development impact
ment proposals (Altshuler and Gomez-Ibanez
fees are assessed by the local government dur-
ing the planning and permitting process
(Altshuler and Gomez-Ibanez 1993). Histori-
1 School of Human Evolution and Social Change, Arizona
cally, most developers provided infrastructure
State University, Tempe, AZ, USA
2
including roads and sidewalks that were built
School of Social Ecology, University of California–Irvine,
Irvine, CA, USA
at the same time as housing or commercial
3 School of Life Sciences, Arizona State University, Tempe,
development. During the 1980s–2000s, impact
AZ, USA
fees spread throughout high growth regions
4 Department of Health Sciences and Department of
(Jeong and Feiock 2006; Burge and Ihlanfeldt
Sociology & Anthropology, Northeastern University
2009). Communities now, however, utilize
Corresponding Author:
development impact fees as a means to offset
Abigail M. York, School of Human Evolution and Social
the broader costs of development projects
Change, Arizona State University, Tempe, AZ 85287, USA.
(Been 2005; Nichols and Chapin 2007).
Email: abigail.york@asu.edu

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16
State and Local Government Review 49(1)
1993). Theoretically, however, development
increase the costs of development to new
impact fees could help to reduce sprawl and
homes, they may cause developers to interna-
achieve a more optimal city size (Brueckner
lize “social costs” or externalities, such as that
1997). Recent work has demonstrated that
associated with traffic congestion, which can
impact fees are much lower than the marginal
reduce both city size and “sprawl” (Brueckner
costs of development (Turnbull 2004), and in
1997). However, because of legal mandates
order to reduce the costs and impacts of
that limit fees, governments do not set fees
sprawl, impact fees should be raised (Turnbull
equal to costs of each new home and develop-
2004; Brueckner 1997). Impact fees typically
ment on the larger community, which reduces
do not equal the marginal social costs nor the
their effectiveness (Bluffstone et al. 2008).
marginal costs of capital improvements asso-
Yet even with their shortcomings, develop-
ciated with the development; rather, increas-
ment impact fees are a more economically
ing impact fees to the economically efficient
efficient means to reduce sprawl than other
level, a higher fee than currently utilized, may
growth management policy tools, such as
require local public support.
growth boundaries (Turnbull 2004).
In general, the role of public support for
There is great debate about who bears the
adoption of development impact fees and
cost of development impact fees; the local
growth management policy has focused on the
context determines whether the burden is
importance of homeownership, particularly the
borne by homebuyers or developers (Ander-
homevoter hypothesis where homeowners vote
son 2005). Impact fees can reduce the value
(or “homevoters”) to push cities to adopt more
of land, especially land that is not yet subdi-
restrictive growth policies in order to maintain
vided, thus placing the burden on landowners
property values and quality of life (Fischel
(Evans-Cowley, Forgey, and Rutherford
2001). Unlike some growth management poli-
2005). Current homeowners often capitalize
cies, local policy makers often support impact
on impact fees through an indirect, positive
fees because of the associated revenue increase
effect on existing home prices (Anderson
(Altshuler and Gomez-Ibanez 1993; Chapman
2005; Ihlanfeldt and Shaughnessy 2004;
2008). Currently, no studies directly investigate
Evans-Cowley and Lawhon 2003).
the public’s support for increasing development
Most growth regulations typically slow the
impact fees. This article seeks to contribute to
development process, but impact fees do not
this gap in the literature. Increasing impact fees
appreciably affect single-family starts (Mayer
to the optimal level in a local economy may
and Somerville 2000; Song 2007) and may
prove politically difficult. As a result, public
even increase them (Burge and Ihlanfeldt
support for increases in impact fees may be
2006). Impact fees may, in fact, reduce friction
necessary in order to reduce the developers’
or at least have no effect on the time associated
sway in city hall. This article begins with a
with approval resulting in no effect in their
review of the existing literature on impact fees
adoption of housing starts (Altshuler and
and growth management more generally, which
Gomez-Ibanez 1993).
provide the foundation for the hypotheses.
There has been tremendous growth in the
Then the data, results, and an exploration of the
utilization of impact fees, but the fee level var-
relevance of this study to understanding impact
ies dramatically (Been 2005). Throughout the
fees and public opinion of growth management
past two decades, cities using impact fees gen-
more generally are presented.
erated increasingly large revenues; for exam-
ple, in Florida in 2005–2006, $2 billion was
generated in impact fees, a twofold increase
Literature
from the mid-1980s (Burge 2010). Initially, the
Development impact fees are one means to
use of impact fees spread over citizen concerns
reduce “excessive growth” (Wassmer 2000;
over rapid growth (Feagin 1983; Finkler,
Brueckner 2007). Because impact fees
Toner, and Popper 1976). In many regions, the

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York et al.
17
inability (or unwillingness) of municipalities to
development impact fees than those in the his-
utilize property tax increases or achieve voter
toric core of a metropolitan region.
approval for bond issues, as is the case in Ari-
zona, has increased utilization of impact fees
Hypothesis 2: Residents in bedroom com-
as a means to accommodate the infrastructure
munities will be less supportive of impact
demands of new residential development
fees than residents in core urban areas.
(Ihlanfeldt and Shaughnessy 2004; Chapman
2008).
A higher percentage of Latinos in a pre-
While the existing literature provides a
cinct increased support for prodevelopment
foundation regarding the effect of impact
ballot measures (Gerber and Phillips 2005),
fees on revenue generation and urban expan-
while cities with larger white populations
sion, there is a scholarly gap in the literature
were more likely to adopt ballot box growth
evaluating individuals’ perception and sup-
controls (Thi Nguyen 2009). There is greater
port for development impact fees. Because
concern about growth among whites but
local citizens, often, play a large role in
greater support for government involvement
changing local land use policies (Pendall
in growth management among minorities
1999), including impact fees, it is imperative
(Chapin and Connerly 2004).
to understand factors that influence these
Hypothesis 3: Non-Hispanic whites will be
views.
more supportive of impact fees than
Fischel’s (2001) “homevoter” plays a cen-
minorities.
tral role in many of these political battles as
a promoter of the status quo and protector of
Supporters of development impact fee gener-
his or her community. Local economic devel-
ally have lower income (Pendall 1999; Albrecht
opment faces protest if the location is adjacent
et al. 1982). Likewise, there is a positive rela-
to homeowners (Pendall 1999). Likewise, pro-
tionship between support for prodevelopment
development ballot measures are less
ballot measures and income, proxied by median
supported in jurisdictions with greater home-
home values (Gerber and Phillips’ 2005). Indi-
ownership (Gerber and Phillips 2005). Rezon-
viduals with lower incomes prefer development
ings supported by city planners may be
in core areas with access to public transportation
defeated when nearby homeowners are
(Lewis and Baldassare 2010). This work stands
opposed (Pendall 1999).
in contrast...