# Impact fee

An impact fee is a one-time charge on new development that helps pay for the roads, parks, water, or schools it needs. Also called development impact fee or system development charge.

Data as of Oct 11, 2026. Page: https://boardwalkai.com/glossary/impact-fee/

## What it is

Impact fees are set by a city, county, or district, often per home or per square foot, and usually collected when permits are issued. The money must pay for new capacity, not day-to-day costs.

## What it tells you

An impact fee credit or reimbursement agreement usually means a developer is building public roads or utilities as part of a project. New fee schedules also show where a city expects growth.

## How it moves through a city or county

1. The city studies expected growth and the cost of new facilities.
2. The council adopts a fee schedule after a public hearing.
3. Builders pay the fees when they get permits or record plats.
4. An agreement may give credits for roads or utilities the developer builds.

Some states have an impact fee law setting what the fees can pay for; school impact fees are allowed in some states and not others. Oregon calls them system development charges.

Rules vary by state, county, and city. These pages describe common practice, not legal advice.

## Find it on Boardwalk

Search Boardwalk for "impact fee" to find credit and reimbursement agreements tied to projects. [Start free trial](https://boardwalkai.com/auth/signup/)

## Related terms

- [Development agreement](https://boardwalkai.com/glossary/development-agreement/): A development agreement is a contract between a local government and a developer setting a project's rules, timing, and public improvements.
- [Special district](https://boardwalkai.com/glossary/special-district/): A special district is a local government unit that funds or runs services like water and roads for one area.
- [Tax increment financing](https://boardwalkai.com/glossary/tax-increment-financing/): Tax increment financing uses the growth in property taxes from new development to pay for public improvements or incentives in that area.

## Common questions

### Who pays impact fees?

The developer or builder pays impact fees, usually when the building permit is issued, and the cost often passes to buyers or tenants. Some places allow deferrals or credits.

### What is an impact fee credit?

An impact fee credit reduces the fees a developer owes in return for building or paying for public improvements, like a road widening. It is usually set out in an agreement the council approves.

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## How to cite

Source: Boardwalk, "Impact fee", boardwalkai.com/glossary/impact-fee/, data as of Oct 11, 2026.

How we count: https://boardwalkai.com/coverage/#how-we-count