Impact Fees: Fees that are charged against new development to help offset the costs of new infrastructure required by the City's growth.
Our ZEMS FAQ includes information about impact fees including:
Impact Fees will cover 91% of the principal costs of the ZEMs, but don’t they result in “double taxation”, i.e. the developer pays the impact fee upfront, but then the owner pays regular property taxes on that same property (including the fee that the developer has passed on to to the buyer)?
Impact Fees are a supplemental funding source as part of the land use the regulatory process to assess a fee on land use development that is associated with additional demands on existing community services. It has been determined that the ZEMs are primarily there to satisfy additional students projected to be arriving in the district over the coming few years, with approximately 9% of the capacity provided by the ZEMs to rectify existing deficiencies. This 9% of the cost of the ZEMs is to be covered by households already served by the schools through the general property tax, with the balance of the cost, 91%, being assessed on new land use development. New residential land use development will be assessed an impact fee to cover the cost of providing school capacity but they will also be assessed annual property taxes. A small amount of property taxes paid will be used to cover the 9% ZEM cost. To offset this chance of “double payment”, the impact fee has a “revenue credit” component which discounts the impact fee based on the year that the land use change occurs and the net present value of the future stream of property taxes that could be used to cover the 9% ZEM component.
RSG Impact Fee Study Report
An impact fee study report completed by management consulting firm RSG evaluated how development in South Burlington places additional demands on the school district. Read the report here.