• Brownfield Redevelopment
     • Green Building Standards
     • Accessory Dwelling Units

     • Historic Preservation
     • Main Street Program

     • Alt. Energy Ordinances
     • Stormwater Management

     • Smart Growth Code Fixes
     • Form-Based Codes
     • LEED-ND
     • Transit Oriented Dev.
     • Zoning Ordinances
     • Scenario Planning

     • Agricultural Security Areas
     • Clustered Subdivisions
     • Official Map Ordinance

     • Access Management
     • Complete Streets Policy
     • Impact Fees
     • Traffic Calming
     • Walkability

Impact Fees

Growing communities often need to improve or build roads to service new developments.  Many municipalities are concerned that these projects will unfairly burden taxpayers instead of new users. Transportation Impact Fees identify the cost of transportation projects and allocate the costs of the projects, wholly or in part, to the new users.

Photo of construction vehicle and crew paving a roadway.

Impact fees are set after an intensive study process which evaluates future development scenarios, planning the future transportation needs to serve that development and determining cost estimates.  The process includes, convening a Transportation Impact Fee Advisory Committee (TIFAC) which must include members of the development industry to guide the process. A Land Use Assumption study must be conducted to determine the potential build out of the area in question. A Roadway Sufficiency Analysis (RSA) and Capital Improvements Plan (CIP) studies the current system and how it functions, determines necessary capacity changes, identifies specific projects and estimates costs associated with an increased level of capacity.

Transportation impact fees can only be used on projects necessitated by new development; any projects needed to improve levels of service must be funded from the general fund. Impact fees are collected at the issuance of building permits. They are held in an interest bearing, dedicated account. Impact fees can be used to fully fund projects on municipally-owned facilities, but can only fund up to 50% of the cost of projects on federal, state or county facilities.

Due to the extensive study requirements, many municipalities find the cost of developing impact fees either too high, or not worth the return. The PennDOT estimates that the costs of studies and plans could range from $50,000 to $65,000[i]. However, a Land Use Assumption, RSA and CIP are good planning tools in their own right and may be beneficial to municipalities pressured by growth.

Impact fees are enabled in the Municipalities Planning Code Article V-A. They may apply to all or part of a municipality and may vary by identified Transportation Service Area. Municipalities may jointly adopt an impact fee ordinance provided they have a pre-existing joint comprehensive plan. PennDOT maintains the authority to require off-site road improvements as a condition for obtaining a Highway Occupancy Permit onto state roads.


  • Shifts transportation costs of new construction onto the new users of the system
  • Provides a clear schedule of fees to the development community instead of uncertain, ad hoc negotiations
  • Dedicated funding for future anticipated projects can indicate lower expected tax rates in the future


  • Significant costs associated with preliminary studies
  • Perception that impact fees will stifle development by increasing costs

Practical Tips

  • Use a consultant that has experience working through all the legal requirements
  • Perform a cost/benefits analysis on expected revenue from impact fees
  • Engage and educate the development community to identify needs and build support
  • Work with the solicitor to ensure compliance with the MPC



[i]“Transportation Impact Fees: A Handbook for Pennsylvania’s Municipalities,” Pennsylvania Department of Transportation, November 2007