Type of Document	Dissertation
Author	Shaughnessy, Timothy Michael
URN	etd-08192004-112347
Title	Estimation of the Effects of Development Impact Fees on Housing and Land Markets
Degree	Doctor of Philosophy
Department	Economics, Department of
Advisory Committee	Advisor Name Title Keith R. Ihlanfeldt Committee Chair Dean H. Gatzlaff Committee Member Randall G. Holcombe Committee Member Thomas W. Zuehlke Committee Member
Keywords	land markets housing markets impact fees
Date of Defense	2003-12-01
Availability	unrestricted
Abstract This dissertation examines the incidence of development impact fees on housing and land markets by empirically estimating house and land price effects and effects on new housing construction in Dade County, Florida from 1985 through 2000. The demographic, economic, and political situation in Dade County is discussed in reference to the County’s eventual adoption of impact fees as a public finance tool for generating revenue to fund infrastructure construction. Previous work on impact fees is analyzed, including theoretical literature that provides the foundation for the empirical work undertaken, as well as empirical literature on impact fee effects in other jurisdictions. A distinction is made between the two primary theoretical approaches to impact fee incidence, described as the “old view” and the “new view” theories. The theoretical differences imply three empirically testable hypotheses of the new view: the effect on new house prices can be greater or less than the fee and will equal expected future property tax savings, the effect on existing house prices will equal the effect on new house prices, and the effect on land prices will depend on whether the expected future property tax savings is larger than the impact fee amount. A metropolitan housing market model (DiPasquale and Wheaton’s stock-flow model) is used to describe variation in price indices for constant-quality new and existing homes and vacant land in Dade County using county and region-specific variables, including a continuous measure of effective impact fees. Results show that an additional dollar of impact fees increases prices on both new and existing homes by about $1.60 which is shown to be consistent with expected future property tax savings, lending empirical support to the new view theory of impact fee incidence. Land prices fall in the presence of impact fees which is inconsistent with the new view, but hypothesized to be due to developer uncertainty whether future fees to be paid will justify a particular land price bid or will cover the future received house price. The presence of a land price effect implies an impact on new housing construction, and the stock-flow model and Mayer and Somerville’s price change model estimates the effect impact fees have on housing starts. The suggested developer uncertainty attributable to the use of impact fees manifests itself in an estimated drop in new housing construction. The results provide support for the new view theory of impact fee incidence and are generally inconsistent with the old view. Developer uncertainty over future impact fee amounts could be tempered by predictable and consistent increases in impact fees as infrastructure construction costs rise.
Files	Filename       Size       Approximate Download Time (Hours:Minutes:Seconds)     28.8 Modem   56K Modem   ISDN (64 Kb)   ISDN (128 Kb)   Higher-speed Access    Shaughnessy_T.pdf 623.48 Kb 00:02:53 00:01:29 00:01:17 00:00:38 00:00:03