What are "impact fees"?

Impact fees are charges imposed on developers to help cover the costs associated with the infrastructure improvements that are necessary to accommodate new development projects. As communities grow and new residential or commercial buildings are constructed, there is often an increased demand for public services and facilities, such as roads, schools, parks, and utility systems. The purpose of impact fees is to ensure that the financial burden of providing this improved infrastructure is shared by those who are directly contributing to the demand.

These fees are typically calculated based on the anticipated impact of a specific development on the community’s existing infrastructure and services. By requiring developers to pay these fees, municipalities can more effectively manage growth, ensure that public facilities can keep pace with development, and maintain quality of life for existing residents. This mechanism allows cities to avoid overextending their resources while still enabling necessary growth and development.

The other choices refer to different financial obligations. Hiring construction workers is a standard expense associated with any development project but does not relate to infrastructure. Payments made by homeowners for municipal services pertain to ongoing operational costs rather than the direct costs of new construction impacts. Taxes levied on property sales are a form of revenue generation for local governments but are not specifically categorized as impact fees, which are tied directly to new development projects