Ken Larsen's website - Impact fees are needed to control growth


According to Wikipedia, "An impact fee is a fee that is imposed by a local government within the United States on a new or proposed development project to pay for all or a portion of the costs of providing public services to the new development. Impact fees are considered to be a charge on new development to help fund and pay for the construction or needed expansion of offsite capital improvements.These fees are usually implemented to help reduce the economic burden on local jurisdictions that are trying to deal with population growth within the area."


Impact fees are restricted by the N.C. Legislature.


Not surprisingly, the North Carolina Homebuilders Association is vehemently against impact fees.  See


According to Councilman Ed Harrison, "The school impact fee, enabled by legislation obtained by Joe Hackney and others in our delegation in the 1990s, is the only impact fee in any municipality in this immediate area except the City of Durham, which notably has transportation impact fees that have helped fund bike/ped projects to a small degree."  The Orange County impact fees for schools are listed here:


To get around these restrictions, Chapel Hill imposes development fees on new development.  It's a convoluted assortment of fees that undoubtedly explain why many developers shun doing business in Chapel Hill.  Click here for the Chapel Hill list of Planning/Development fees


Councilman Ed Harrison told me “an impact fee is defined very specifically in state laws all over the place. We do not charge developers impact fees. What we charge are development fees. We would need legislative authorization to charge impact fees beyond the ones that the County (not Chapel Hill) charges for schools. Durham County attempted to charge impact fees for schools, lost in court, and had to pay a whole bunch of money back to developers.”


In my opinion, if Chapel Hill ditched its development fee system, that would simplify its development process, but it would undoubtedly raise the cost to taxpayers in the form of higher property taxes.


As I research and learn more, I will add to this web page.  This page is in its infancy.


Questions that need to be answered:


  1. Can developers sue Chapel Hill to disallow the imposition of development fees?  They appear to be a different name for impact fees, and impact fees are severely restricted by NC laws.

  2. Chapel Hill law ties development fees to the SUP (Small Area Plan) process.  As Chapel Hill phases from SUP to FBC process, can that cause development fees to be dropped?

  3. The NC Homebuilders succeeded in restricting the imposition of impact fees in NC.  How are other NC towns coping with that?  What do other states do?

  4. If development fees are disallowed, what does that do to the cost of new development?  Will it tip it towards making all new development unaffordable?  ... unless property taxes are raised?


There are also impact taxes.  Orange County levies a special tax on property owners to pay for schools. 


A tax is a yearly payment that property owners must pay.  A fee is a one time payment that a new property owner must pay.  I believe that's what the difference is.


I was prompted to produce this web page when Councilman Ed Harrison took issue with my use of the term impact fees in my September 28, 2015 WCHL Commentator's segment


(September 1, 2016) "NC Supreme Court smacks munys over local impact fees"


(June 1, 2017) David Schwartz:  When you join a religious congregation or a recreation club you typically pay, in addition to annual dues, some sort of initial membership fee that helps pay capital improvement or expansion costs. When I first joined my synagogue, for example, I had to contribute a hefty one-time sum to the “building fund" help pay off the mortgage, replace the roof, etc. Similarly, the small neighborhood pool I belong to charges a one-time initiation fee in addition to the annual membership fee. In both instances, it’s understood that new members ought to help pay the costs of ongoing and expected future major infrastructure investments as they are the beneficiaries of the infrastructure investments paid for by the members who preceded them. 


Why should it be any different for new housing? New residents send their children to schools paid for by the taxes of the residents who preceded them, or drive on roads and play in parks paid for by the residents who preceded them. It seems entirely reasonable to ask new members of the Chapel Hill community to pay, in addition to annual taxes, a one-time fee to help cover the cost of ongoing and expected future infrastructure investments. Development impact fees may not be the most efficient or equitable way to levy these fees, but if the general principle is valid for synagogues and neighborhood pools, it should be valid also for the Town as a whole.


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