Comment on Shishir Mathur's “do impact fees raise the price of existing housing?”

Abstract

Mathur finds that impact fees have different effects on affordability for “low‐quality” and “high‐quality” units. His study indicates that such fees increase prices for existing high‐quality homes, but not for existing low‐quality homes. He concludes that this finding is good news for those who support impact fees, because it would suggest that they do not affect affordability in lower‐income neighborhoods. In offering a different view, I first discuss the intent of impact fees and illustrate that certain types of fees should raise prices for low‐quality housing, regardless of whether it is new or existing. Noting that not all impact fees are created equal, I also suggest a key refinement for future research to explore this aspect. Finally, I identify different types of fees and describe two scenarios in which the price effects would be expected to differ from those Mathur describes.