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Impact Fees and Employment Growth

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  • Adam T. Jones

Abstract

Local jurisdictions across the country continue to adopt alternative financing options, although the effects of these remain uncertain. There are two views of impact fees: (a) an old view, that fees are a tax on development increasing prices and reducing quantity and (b) a new view, that fees provide services and reduce future taxes, thus increasing demand and prices. The research presented in this study, based on data from Florida counties, finds that the relationship between fees on commercial development and fees on employment differs across different categories of economic activity. The use of fees is positively related to service-sector employment growth and negatively related to manufacturing employment growth. This result suggests that different sectors realize different levels of benefits from infrastructure provided through fee revenue and that policy decisions based on total employment may suffer from overaggregations and lead to unintended consequences.

Suggested Citation

  • Adam T. Jones, 2015. "Impact Fees and Employment Growth," Economic Development Quarterly, , vol. 29(4), pages 341-346, November.
    • Handle: RePEc:sae:ecdequ:v:29:y:2015:i:4:p:341-346
    DOI: 10.1177/0891242415589368
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    References listed on IDEAS

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    1. Yinger, John, 1998. "The Incidence of Development Fees and Special Assessments," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 23-41, March.
    2. 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.
    3. Jennifer S. Evans‐Cowley & Fred A. Forgey & Ronald C. Rutherford, 2005. "The Effect of Development Impact Fees on Land Values," Growth and Change, Wiley Blackwell, vol. 36(1), pages 100-112, February.
    4. Gregory S. Burge & Arthur C. Nelson & John Matthews, 2007. "Effects of proportionate‐share impact fees," Housing Policy Debate, Taylor & Francis Journals, vol. 18(4), pages 679-710, January.
    5. Burge, Gregory & Ihlanfeldt, Keith, 2006. "Impact fees and single-family home construction," Journal of Urban Economics, Elsevier, vol. 60(2), pages 284-306, September.
    6. Burge, Gregory & Ihlanfeldt, Keith, 2009. "Development impact fees and employment," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 54-62, January.
    7. 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.
    8. 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.
    9. 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.
    Full references (including those not matched with items on IDEAS)

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