Abstract
What factors account for local institutional choices such as adoption of impact fees? Is there a pattern to impact fee adoptions? These questions are of critical importance because in the United States, local governments are primarily responsible for defining property rights concerning how people use land and providing basic public services to citizens. The theoretical framework to investigate impact fee adoption combines political market approaches based in interest group theories of property rights and diffusion theories of innovation. This framework identifies the local demanders and suppliers, intergovernmental institutions, administrative capacity, diffusion, and financial conditions. Empirical analysis focuses on adoption of impact fees—transportation, parks, fire/EMS, police/corrections, school, and library—in 66 Florida counties from 1977 to 2001, using event history analysis.
The first impact fee in Florida was parks impact fees adopted by Broward County in 1977. The first ten adoptions occurred in counties located in the southern and central regions of Florida except for Holmes County, and the adoptions spread to the northern counties in the mid- and late 1980s. Counties have frequently changed impact fee schedules. Parks impact fees have been changed more often—about 4 times on average—than any other type of fees.
The empirical results regarding determinants of impact fee adoptions provide several key lessons. First, the results suggest that interest groups such as high-income citizens and the development community have a significant influence on impact fee adoptions. Second, motivations of local government decision makers promote controversial impact fee adoptions such as school impact fees. Third, Florida counties experienced significant increase in the impact fee adoptions after the Growth Management Act of 1985 and case laws in 1983. Fourth, counties are more likely to adopt impact fees if more neighboring counties have adopted impact fees. Fifth, administrative capacity as a critical resource influences impact fee adoptions. Counties having employees with professional and skilled expertise are more likely to adopt impact fees. Sixth, previous studies on determinants of impact fee adoptions attributed the adoption of impact fees to local growth, especially population growth. The empirical findings provide consistent and strong effects of local growth on impact fee adoptions.
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