Volume 18, Issue 4
2007

 

Mathur finds that impact fees have different effects on affordability for “low-quality” and “high-quality” units. His study indicates that such fees increase prices for existing high-quality homes, but not for existing low-quality
homes. He concludes that this finding is good news for those who support impact fees, because it would suggest that they do not affect affordability in lower-income neighborhoods.

In offering a different view, I first discuss the intent of impact fees and illustrate that certain types of fees should raise prices for low-quality housing, regardless of whether it is new or existing. Noting that not all impact fees are created equal, I also suggest a key refinement for future research to explore this aspect. Finally, I identify different types of fees and describe two scenarios in which the price effects would be expected to differ from those Mathur describes.

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