IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v37y2009i5p613-636.html
   My bibliography  Save this article

Longitudinal Effects of Impact Fees and Special Assessments on the Level of Capital Spending, Taxes, and Long-Term Debt in American Cities

Author

Listed:
  • Changhoon Jung

    (Auburn University, jungcha@auburn.edu)

  • Chul-Young Roh

    (East Tennessee State University)

  • Younguck Kang

    (KDI School of Public Policy and Management)

Abstract

This article examines whether the use of impact fees and special assessments affect the level of capital spending and two major own source revenues of local capital spending (taxes and long-term debt) by analyzing a panel of 695 American cities with populations over 20,000 during the time period of 1980—2000. Since impact fees and special assessments are heavily used in a growing community and because it covers less than half the costs of new development, the findings demonstrate that the private financing of public infrastructure (impact fees and special assessments) increases the level of local capital spending. It also leads to an increase in the level of long-term debt use. Although it provides partial tax relief, it is not a strong substitute for taxes. Thus, impact fees and special assessments are not a substitute for local capital spending. It is rather a supplemental revenue source to fund local capital infrastructure.

Suggested Citation

  • Changhoon Jung & Chul-Young Roh & Younguck Kang, 2009. "Longitudinal Effects of Impact Fees and Special Assessments on the Level of Capital Spending, Taxes, and Long-Term Debt in American Cities," Public Finance Review, , vol. 37(5), pages 613-636, September.
    • Handle: RePEc:sae:pubfin:v:37:y:2009:i:5:p:613-636
    DOI: 10.1177/1091142109344585
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1091142109344585
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1091142109344585?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Charles J. Delaney & Marc T. Smith, 1989. "Impact Fees and the Price of New Housing: An Empirical Study," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(1), pages 41-54, March.
    2. Burge, Gregory & Ihlanfeldt, Keith, 2006. "Impact fees and single-family home construction," Journal of Urban Economics, Elsevier, vol. 60(2), pages 284-306, September.
    3. Mayer, Christopher J. & Somerville, C. Tsuriel, 2000. "Land use regulation and new construction," Regional Science and Urban Economics, Elsevier, vol. 30(6), pages 639-662, December.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. David Chicoine & Norman Walzer, 1986. "Factors affecting property tax reliance: Additional evidence," Public Choice, Springer, vol. 49(1), pages 17-28, January.
    10. Gregory Burge & Keith Ihlanfeldt, 2006. "The Effects Of Impact Fees On Multifamily Housing Construction," Journal of Regional Science, Wiley Blackwell, vol. 46(1), pages 5-23, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Burge, Gregory, 2014. "The capitalization effects of school, residential, and commercial impact fees on undeveloped land values," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 1-13.
    2. Adam T. Jones, 2015. "Impact Fees and Employment Growth," Economic Development Quarterly, , vol. 29(4), pages 341-346, November.
    3. Burge, Gregory & Ihlanfeldt, Keith, 2006. "Impact fees and single-family home construction," Journal of Urban Economics, Elsevier, vol. 60(2), pages 284-306, September.
    4. Burge, Gregory & Ihlanfeldt, Keith, 2009. "Development impact fees and employment," Regional Science and Urban Economics, Elsevier, vol. 39(1), pages 54-62, January.
    5. Jenny Schuetz & Rachel Meltzer & Vicki Been, 2011. "Silver Bullet or Trojan Horse? The Effects of Inclusionary Zoning on Local Housing Markets in the United States," Urban Studies, Urban Studies Journal Limited, vol. 48(2), pages 297-329, February.
    6. Adam Found, 2021. "Development Charges and Housing Affordability: A False Dichotomy?," IMFG Papers 56, University of Toronto, Institute on Municipal Finance and Governance.
    7. J. Peter Clinch & Eoin O'Neill, 2010. "Designing Development Planning Charges: Settlement Patterns, Cost Recovery and Public Facilities," Urban Studies, Urban Studies Journal Limited, vol. 47(10), pages 2149-2171, September.
    8. Randy Bluffstone & Matt Braman & Linda Fernandez & Tom Scott & Pei‐Yi Lee, 2008. "Housing, Sprawl, And The Use Of Development Impact Fees: The Case Of The Inland Empire," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 433-447, July.
    9. Adam Jones, 2015. "Fees and Firms: An Empirical Examination of the Relationship Between Development Impact Fees and Firms," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 261-269, June.
    10. Ball, Michael & Meen, Geoffrey & Nygaard, Christian, 2010. "Housing supply price elasticities revisited: Evidence from international, national, local and company data," Journal of Housing Economics, Elsevier, vol. 19(4), pages 255-268, December.
    11. Xiaofang Dong & Shihe Fu & Yufei Yuan, 2013. "Impact Fees and Real Estate Prices: Evidence from 35 Chinese Cities," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 8(2), pages 207-219, June.
    12. Gyourko, Joseph & Molloy, Raven, 2015. "Regulation and Housing Supply," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1289-1337, Elsevier.
    13. Bimonte, Salvatore & Stabile, Arsenio, 2015. "Local taxation and urban development. Testing for the side-effects of the Italian property tax," Ecological Economics, Elsevier, vol. 120(C), pages 100-107.
    14. Jenny Schuetz & Rachel Meltzer & Vicki Been, 2009. "Silver Bullet or Trojan Horse? The Effects of Inclusionary Zoning on Local Housing Markets," Working Paper 8519, USC Lusk Center for Real Estate.
    15. repec:wyi:journl:002181 is not listed on IDEAS
    16. Mark Skidmore, 2014. "Housing Affordability: Lessons from the United States," Treasury Working Paper Series 14/11, New Zealand Treasury.
    17. Lozano-Gracia, Nancy & Young, Cheryl & Lall, Somik V. & Vishwanath, Tara, 2013. "Leveraging land to enable urban transformation : lessons from global experience," Policy Research Working Paper Series 6312, The World Bank.
    18. Mark Skidmore, 2014. "Housing Affordability: Lessons from the United States," Treasury Working Paper Series 14/11, New Zealand Treasury.
    19. Norman Gemmell & Arthur Grimes & Mark Skidmore, 2019. "Do Local Property Taxes Affect New Building Development? Results from a Quasi-Natural Experiment in New Zealand," The Journal of Real Estate Finance and Economics, Springer, vol. 58(2), pages 310-333, February.
    20. Gorecki, Paul K. & Hennessy, Hugh & Lyons, Seán, 2011. "How impact fees and local planning regulation can influence deployment of telecoms infrastructure," Papers WP401, Economic and Social Research Institute (ESRI).
    21. 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.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:37:y:2009:i:5:p:613-636. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.