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Impact fees and the financial structure of development

Impact fees and the financial structure of development There is increasing pressure to shift the financial burden of the provision of off‐site infrastructure and services from government to building producers and consumers. Some measures to achieve this end have already been introduced on a piecemeal basis. Examines the financial implications of impact fees for development. The amount of the fee levied on a particular development is determined by the fee system. Its effects on the economics of property development are determined by the financial structure of the development. There is no necessary equivalence between impact fees and the ability of schemes to bear them. The same dichotomy exists, by extension, in the property market as a whole. Any fee system based on actual infrastructure impact will produce charges whose pattern differs from that of market strength. Weak markets would be faced with much greater adjustment problems than strong markets. As a result, impact fees threaten to disrupt existing property market structures. Developers should be aware of the fundamental change in their operational environment which would ensue. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Property Finance Emerald Publishing

Impact fees and the financial structure of development

Journal of Property Finance , Volume 7 (2): 21 – Jun 1, 1996

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References (25)

Publisher
Emerald Publishing
Copyright
Copyright © 1996 MCB UP Ltd. All rights reserved.
ISSN
0958-868X
DOI
10.1108/09588689610119711
Publisher site
See Article on Publisher Site

Abstract

There is increasing pressure to shift the financial burden of the provision of off‐site infrastructure and services from government to building producers and consumers. Some measures to achieve this end have already been introduced on a piecemeal basis. Examines the financial implications of impact fees for development. The amount of the fee levied on a particular development is determined by the fee system. Its effects on the economics of property development are determined by the financial structure of the development. There is no necessary equivalence between impact fees and the ability of schemes to bear them. The same dichotomy exists, by extension, in the property market as a whole. Any fee system based on actual infrastructure impact will produce charges whose pattern differs from that of market strength. Weak markets would be faced with much greater adjustment problems than strong markets. As a result, impact fees threaten to disrupt existing property market structures. Developers should be aware of the fundamental change in their operational environment which would ensue.

Journal

Journal of Property FinanceEmerald Publishing

Published: Jun 1, 1996

Keywords: Development; Economics; Impact fees; Finance; Property markets

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