Economic growth in the US from 2003 through 2008 attributed to the major housing boom generated revenues for local governments in the form of development impact fees. Development impact fees are charges imposed on a developer to offset the new development’s additional costs/burden imposed on society. However, new developments are also a benefit for society/local economies. As a consequence to the end of the housing boom, the establishment of new developments has slowed, meaning fewer development impact fees and a decline in externalities for local governments /communities.
· Summarize the actions local governments can take to address the reduction in fees given the positive externality that is provided by these new developments. In your answer, compare and contrast the options that the local governments need to consider given the lack of resources currently available.
· Evaluate the environmental impacts that can occur with new developments and address the legal ramifications that can arise.
· Compare and contrast the different market effects associated with increasing and reducing development impact fees.