What is an Impact Fees?
One-time fees charged by local governments to developers to offset the cost of public infrastructure and services required to support new development, such as roads, schools, and utilities.
Understanding Impact Fees
Impact fees are typically charged to offset the cost of:
- Road improvements and transportation infrastructure
- Water and wastewater system capacity
- School facilities (if development increases population)
- Parks and recreation facilities
- Public safety services (fire, police)
- Library and community facilities
- Utility infrastructure expansion
Impact fees are calculated based on:
- Type and size of development
- Number of units, sites, or capacity
- Estimated impact on public services
- Local fee schedules and formulas
For outdoor hospitality properties, impact fees may be based on:
- Number of glamping units or RV sites
- Occupancy capacity (number of guests)
- Water and sewer connections
- Road access and traffic generation
- Overall development size
Impact fee amounts vary significantly by location:
- Low-fee areas: $500-$2,000 per unit/site
- Moderate-fee areas: $2,000-$8,000 per unit/site
- High-fee areas: $8,000-$20,000+ per unit/site
Total impact fees for a project can be substantial:
- 30-unit glamping resort: $15K-$150K+
- 100-site RV park: $50K-$500K+
- 80-site campground: $40K-$400K+
Impact fees are typically paid:
- Before building permits are issued
- At time of utility connections
- As a condition of development approval
- Sometimes in installments based on development phases
Impact fees can be:
- **Fixed:** Set amount per unit/site
- **Calculated:** Based on formulas considering development size and impact
- **Negotiable:** Sometimes negotiable for large developments or economic development projects
For developers, impact fees represent:
- Significant upfront cost
- Must be paid before revenue generation begins
- Affects project economics and financing needs
- May vary by jurisdiction and change over time
Impact fee considerations:
- Research local fee schedules before property purchase
- Factor into development budgets and financing
- May be negotiable for large projects
- Can sometimes be paid in phases for phased development
- May qualify for credits or reductions in some cases
Sage Outdoor Advisory includes impact fee analysis in our feasibility studies, helping clients understand local impact fee requirements, estimate costs, factor fees into development budgets, and evaluate fee structures as part of overall project economics.
Examples of Impact Fees
- •A glamping resort developer in a high-impact-fee jurisdiction pays: $8,500 per unit × 25 units = $212,500 in impact fees. These fees must be paid before building permits are issued, adding to upfront capital requirements. The feasibility study identifies these fees and factors them into the $1.8M development budget, affecting financing needs and project economics.
- •An RV park developer in a moderate-fee area pays impact fees of $3,200 per site × 80 sites = $256,000. The fees are paid in two installments: 50% at permit issuance, 50% at utility connection. The phased payment helps with cash flow, but still represents a significant cost that must be financed or funded upfront.
- •A campground developer discovers that impact fees vary by site type: Full hookup sites = $4,500 each, partial hookup = $2,800, primitive sites = $1,200. For a mix of 40 full hookup, 30 partial, and 10 primitive sites, total impact fees = $180K + $84K + $12K = $276K. The feasibility study factors these variable fees into development costs.
Common Use Cases
- •Budgeting development costs and capital requirements
- •Evaluating project economics and feasibility
- •Planning financing needs
- •Comparing development costs across jurisdictions
Related Services
Frequently Asked Questions About Impact Fees
What are impact fees and when are they paid?
Impact fees are one-time charges by local governments to offset infrastructure costs for new development. They're typically paid before building permits are issued or at utility connection, and can range from $500-$20,000+ per unit/site depending on location and development type.
How much do impact fees cost?
Impact fees vary significantly by location: low-fee areas may charge $500-$2,000 per unit/site, moderate areas $2,000-$8,000, and high-fee areas $8,000-$20,000+. Total fees for a project can range from tens of thousands to hundreds of thousands of dollars, representing a significant development cost.
Can impact fees be negotiated?
Impact fees are sometimes negotiable for large developments or economic development projects. Some jurisdictions offer credits, reductions, or phased payment options. It's worth discussing with local planning departments, especially for significant projects that bring economic benefits to the community.
Do impact fees vary by development type?
Yes, impact fees often vary by development type, size, and capacity. Full-service properties may pay higher fees than basic facilities. Fees may also vary based on number of units, occupancy capacity, utility connections, and traffic generation. A feasibility study should identify specific fee requirements for your project type.
Need Help with Your Outdoor Hospitality Project?
Our experts can help you understand how impact fees applies to your project.
Schedule Free Consultation