Development impact fees and the acquisition of infrastructure

This article considers the impact that the use of impact development fees has on the level of capital investment made by local governments in the United States. Using a sample of 85 cities, we find that the use of fees is associated with lower levels of capital spending. The data also reveal that the debt-to-expenditure ratio for these cities is associated with higher levels of capital spending, leading us to conclude that fees act as a quasi-pricing mechanism regulating the amount of capital investment demanded by developers.