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Equity in Infrastructure Finance: When Are Impact Fees Justified?


  • Jonathan C. Levine


To the extent that impact fee financing of infrastructure replaces the property tax, it shifts payment from owners of existing property to parties associated with newly developing property. Rapid growth in a community is often cited as justification for this shift. A model of intergenerational equity is proposed based on benefit principle taxation and capitalization of tax costs and infrastructure benefits. The study concludes that rapid growth per se need not burden existing property owners unfairly. Unanticipated rapid growth, on the other hand, can lead to excess tax burdens on existing residents that may appropriately be mitigated through impact fees.

Suggested Citation

  • Jonathan C. Levine, 1994. "Equity in Infrastructure Finance: When Are Impact Fees Justified?," Land Economics, University of Wisconsin Press, vol. 70(2), pages 210-222.
  • Handle: RePEc:uwp:landec:v:70:y:1994:i:2:p:210-222

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    References listed on IDEAS

    1. M J Hagey & E J Malecki, 1986. "Linkages in High Technology Industries: A Florida Case Study," Environment and Planning A, , vol. 18(11), pages 1477-1498, November.
    2. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-321, May.
    3. M J Hagey & E J Malecki, 1986. "Linkages in high technology industries: a Florida case study," Environment and Planning A, Pion Ltd, London, vol. 18(11), pages 1477-1498, November.
    4. James P. Miller & Herman Bluestone, 1988. "Prospects for Service Sector Employment Growth in Non-Metropolitan America," The Review of Regional Studies, Southern Regional Science Association, vol. 18(1), pages 28-41, Winter.
    5. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, Oxford University Press, vol. 80(2), pages 190-207.
    6. P N O'Farrell & B O'Loughlin, 1981. "New Industry Input Linkages in Ireland: An Econometric Analysis," Environment and Planning A, , vol. 13(3), pages 285-308, March.
    7. James P. Miller, 1989. "The Product Cycle and High Technology Industry in Nonmetropolitan Areas, 1976-1980," The Review of Regional Studies, Southern Regional Science Association, vol. 19(1), pages 1-12, Winter.
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    Cited by:

    1. 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.
    2. Yinger, John, 1998. "The Incidence of Development Fees and Special Assessments," National Tax Journal, National Tax Association, vol. 51(1), pages 23-41, March.
    3. Hugo Priemus & Erik Louw, 2002. "Recovery of land costs: a land policy instrument missing in the Netherlands?," European Journal of Housing Policy, Taylor and Francis Journals, vol. 2(2), pages 127-146, August.
    4. 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.

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