Assessment of Georgia Development Impact Fees

Housing that is affordable and close to excellent schools and lucrative jobs is becoming unattainable for many Georgians. This is due to several factors, from the rising cost of building materials and lack of available land for development, to onerous building regulations in which the cost is ultimately passed on from builders and developers to the buyer. One regulation that has received attention recently for its contribution to the cost of housing is development impact fees. While impact fees are only indicative of one regulatory cost, there is growing concern that local governments are utilizing them to artificially inflate the cost of local housing, rather than as the policy tool to account for smart community growth as they were originally intended.

The purpose of this study is to provide a publicly available, comprehensive list of all existing development impact fees in Georgia. These impact fees are reported in their entirety when applicable, with examinations of single-family and multifamily rates, and maps that provide a visual representation of the variations among statewide jurisdictions. As cities and counties account for continued growth and consider whether to raise existing impact fees or impose new fees, transparency and comparative data are valuable tools for local stakeholders, industry officials and policymakers.

Introduction

For the past half-century, Georgia has experienced sustained population growth, averaging more than 1 million new people per decade since 1970. As the number of residents grew, local governments were forced to contend with increasing demand for public services such as roads, parks, libraries, water and sewer. New schools were required as more families moved in, along with the need for additional public safety facilities to account for the growth. In turn, some Georgia cities began experimenting in the 1980s with having developers and builders pay what are known as “impact fees” to finance this growing need to fund local infrastructure.

Impact fees were first introduced in Hinsdale, Illinois, in 1947 to finance an expansion of the local water treatment plant. The Illinois Home Building Association sued the local jurisdiction, lost its case, and impact fees became a legitimized tool for local governments to pay for capital expenditures, but not operating expenses. As the national population migrated south, Georgia and other Sun Belt states began experimenting with the impact fee model that was already popular in cities like New York City, Philadelphia and Chicago in the 1950s and 1960s.

During the 1980s, Gov. Joe Frank Harris and Georgia legislators sought to regulate local governments’ ability to enact impact fees by “enabling” them at the state level. After a series of meetings with city and county officials, developers, builders, real estate agents and other stakeholders, the state legislature passed the Georgia Development Impact Fee Act (DIFA) that was enacted in 1990. DIFA created regulations that allow local municipalities and counties to levy impact fees for new developments by assessing a portion of the additional capital needed for the new facilities and services.

In Georgia, development impact fees are only authorized to pay for the following: water treatment and distribution; wastewater treatment and disposal facilities; roads, streets and bridges; stormwater control; parks, open space and recreation areas; public safety facilities including police, fire, emergency medical and rescue facilities; and libraries.¹https://rules.sos.ga.gov/gac/110-12-2

Notably, this means that impact fees are not legally allowed to fund schools, hospitals, sanitation services, or operational expenses for capital improvement.

The theory behind enacting impact fees is establishing a regulated system that allows local governments to raise capital for the new infrastructure required without raising taxes on all citizens. There are even micro-level requirements within local governments that assess impact fees, such as defined service areas that are required for the jurisdiction to implement and collect the impact fee. DIFA is also intended to ensure that adequate public facilities are available for new growth and development; establish uniform standards for local governments to determine impact fee payments; and ensure that new growth and development is required to pay no more than its proportionate share.²http://ga.elaws.us/law/section36-71-1

Implementation Process for Impact Fees

Local governments are required to follow a series of steps before implementing an impact fee ordinance. Given the complicated nature of this process, local governments typically contract with outside consultants to manage the process and produce the required documentation. First, all local governments must adopt a comprehensive plan that contains a Capital Improvements Element (CIE), which is “intended to be a planning tool to help local governments make rational decisions about the provision of community facilities and to provide legal support for a community’s impact fee ordinance.”³https://www.dca.ga.gov/sites/default/files/guide.difa_.pdf

The CIE evaluates a series of local measures, including the existing level of service, future growth projections, and what additional facilities are needed along with their cost and anticipated funding source. While the CIE is based on a 20-year projection, it is required to be updated annually along with a five-year Short Term Work Program that outlines more immediate spending needs.⁴https://landmatters.wordpress.com/peter-olson-articles-at-land-matters/the-use-of-zoning-conditions-and-impact-fees/

State law also requires local governments to establish a Development Impact Fee Advisory Committee consisting of five to 10 members, with at least half of the membership consisting of representatives from the development, building or real estate industries.⁵http://ga.elaws.us/law/section36-71-5

In a 2004 report (revised in 2007) by the Land Use Clinic at the University of Georgia Law School, the author noted that an impact fee ordinance must comply with “many substantive requirements.” The author continues:

These substantive requirements include creation of a schedule of impact fees for varying land uses within a service area that imposes fees on a per unit and service area basis. Impact fees must be based on the actual, or reasonable estimates of, cost of providing services to the area and must take into account the present value of any future funding sources. The ordinance must allow parties to request an individual assessment of impact fees for their property. The ordinance must have a system for giving credit to developers or their predecessors in title who have already paid fees or made dedications for a project and a refund policy if these credits exceed the amount of the impact fee. The ordinance must require that impact fee funds be spent on the service and in the service area from which the fees were collected. Finally, the ordinance must contain a mechanism for appealing the imposition of impact fees.⁶https://digitalcommons.law.uga.edu/landuse/4

Once the ordinance has been proposed, two public hearings are required prior to implementation, with the second hearing held at least two weeks after the first hearing.⁷http://ga.elaws.us/law/section36-71-6 These hearings are often attended by developers, builders, concerned citizens and other interested parties to voice their support, opposition or request of changes to the ordinance.

Upon enactment of an impact fee, local governments are required to update their CIEs and Short Term Work Programs annually, including any alterations to the planned use of impact fees.

Study Methodology

Fifty-four local governments have had their impact fees reviewed and authorized by the Georgia Department of Community Affairs (DCA) to assess impact fees for new development in their community.⁸https://www.dca.ga.gov/sites/default/files/local_government_impact_fee_programs_as_of_january_1_2021.pdf Research was conducted on each of these jurisdictions for this study. Residential properties are typically categorized into single-family homes, multifamily apartments, and multifamily condos and townhouses. Although most local governments that have implemented impact fees limit their rates to a broad assessment based on these three housing categories, some jurisdictions have implemented additional rate tiers which are explained in detail where applicable.

Impact fee data were collected from publicly available information when available. The primary source for both impact fee rates and revenue was often each local government’s Annual Comprehensive Financial Report (ACFR), which are financial audits required by the state of Georgia. Municode⁹https://library.municode.com/, a repository of government laws, rules and regulations, was also used to find impact fee rates and classifications for residential structures when that information was not available through ACFR or the respective local government website.

State law requires local governments to prepare “an annual report describing the amount of any development impact fees collected, encumbered, and used during the preceding year by category of public facility and service area.”¹⁰http://ga.elaws.us/law/section36-71-8 However, local governments that provide comprehensive impact fee data, such as rates, revenues, capital expenditures, strategic planning and analysis, were found to be uncommon.

Most of the local governments in Georgia that are authorized to assess impact fees but do not currently charge them did not reference development impact fees on their websites. One notable exception to this includes Gilmer County and the cities of Ellijay and East Ellijay, which have provided public notice that an impact fee ordinance is under consideration in all three jurisdictions. Effingham County, by contrast, still lists single-family and multifamily impact fees in its official code but stopped collecting them roughly a decade ago.¹¹See Appendix.

For impact fee rates and revenues that were not publicly available online, the Georgia Public Policy Foundation called, emailed and/or made public records requests from the relevant finance and zoning departments to obtain the information. These notes are provided in the Appendix. Total annual revenues collected from impact fees were less commonly available online. Approximately 40% of these figures were collected from phone calls, emails and public records requests.

Two jurisdictions, Atlanta and Roswell, assess single-family impact fee rates based on square footage. Multifamily rates are collected by three jurisdictions at tiered rates based on either number of stories for the development (Atlanta and Bryan County) or square footage per unit (Roswell).

Two jurisdictions, Spalding County and Thomas County, assess impact fees for both single-family and multifamily at different rates based on location. In these counties, development within the city limits of Griffin and Thomasville, respectively, is assessed at a lower rate than outside of the city limits.

Ten of the 54 cities and counties whose impact fees were authorized by the DCA have not implemented them. They include Brooks, Cartersville, East Ellijay, Ellijay, Gilmer County, Jones County, Macon-Bibb County, Orchard Hill, Sunny Side and Woolsey. Gilmer County and the cities of East Ellijay and Ellijay have had exploratory meetings about implementing an impact fee, but no decision had been made as of publication.

In order to calculate the statewide median and average impact fees, when considering jurisdictions like Atlanta or Roswell that charge a range of rates, we used the median cost tier or applied the current average home size of 2,261 square feet.¹²https://www.statista.com/statistics/456925/median-size-of-single-family-home-usa/#:~:text=Median%20size%20of%20single%20family%20house%20in%20the%20U.S.%202000%2D2020&text=The%20average%20single%20family%20house,2%2C261%20square%20feet%20by%202020. Jurisdictions which do not currently charge impact fees were not accounted for in the statewide average and median.

Georgia Development Impact Fees by Town, City, & County

Single-Family Home Impact Fees

The average impact fee (when present) for single-family homes in the state of Georgia is $2,439.62. The median impact fee rate for single-family homes (when present) is $2,010.18. The 10 jurisdictions that are approved to charge impact fees for single-family development but do not currently do so were not included in these calculations. The lowest single-family impact fee statewide is the city of Hampton in Henry County, which is $229.15, and the highest single-family impact fee is the city of Milton in Fulton County, with a rate of $7,757.85.

https://datawrapper.dwcdn.net/Nrj3e/11/

The ten largest single-family home impact fees in Georgia:

Government	Type	Single Family Rate
Milton	City	$7,757.85
Sandy Springs	City	$6,854.82
Alpharetta	City	$6,689.53
Effingham*	County	$4,600.00
Cumming	City	$4,589.00
Peachtree City	City	$4,233.78
Canton	City	$3,945.75
Atlanta	City	$3,812.67
Forsyth	County	$3,804.00
Fayetteville	City	$3,755.07

*Does not currently collect impact fees.

Multifamily Apartment Impact Fees

The average impact fee rate (when present) for multifamily apartments in the state of Georgia is $2,232.29 and the median (when present) is $1,929.93. The 10 jurisdictions that are approved to charge impact fees for multifamily development but do not currently do so were not included in these calculations. The lowest multifamily apartment impact fee statewide is the city of Hampton, which is $229.15. The highest multifamily apartment impact fee is the city of Milton with a rate of $7,757.85 per unit. 

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The 10 largest multifamily apartment impact fee rates in the state:

Government	Type	Multifamily Apartment Rate
Milton	City	$7,757.85
Alpharetta	City	$6,689.53
Sandy Springs	City	$6,529.69
Peachtree City	County	$4,233.78
Canton	City	$3,819.83
Fayetteville	City	$3,755.07
Rockdale	City	$3,568.68
Henry	City	$3,544.46
Senoia	County	$3,394.04
Roswell	City	$3,238.00

Multifamily Townhouse and Condo Impact Fees

The average impact fee rate (when present) for multifamily townhouses and condos in the state of Georgia is $2,237.19 and the median (when present) is $1,923.92. The 10 jurisdictions that are approved to charge impact fees for multifamily development but do not currently do so were not included in these calculations. As with multifamily apartment impact fees, the lowest multifamily townhouse and condo impact fee statewide is the city of Hampton, which is $229.15, and the highest multifamily townhouse and condo impact fee is the city of Milton with a rate of $7,757.85 per unit. 

https://datawrapper.dwcdn.net/Wcjob/10/

The 10 largest multifamily townhouse and condo impact fee rates in the state:

Government	Type	Multifamily Townhouse and Condo Rate
Milton	City	$7,757.85
Sandy Springs	City	$6,854.82
Alpharetta	City	$6,689.53
Peachtree City	City	$4,233.78
Canton	City	$3,782.97
Fayetteville	City	$3,755.07
Rockdale	City	$3,568.68
Henry	City	$3,544.46
Senoia	City	$3,394.04
Roswell	City	$3,238.00

Annual Total Revenues

Impact fees represent a significant source of revenue for the governments that levy them. The table below contains total revenue from each jurisdiction’s most recent fiscal year that is publicly available. The highest annual revenue derived from impact fees was Cherokee County with $8,576,705 in FY 2021. The lowest was the city of Hampton with $2,187, also in FY 2021. The jurisdictions that do not currently levy impact fees but are authorized to do so are also listed in the table. Of note, the revenue numbers for Atlanta are from FY 2019 and they have since been raised in FY 2021, FY 2022, and are scheduled to be raised again in FY 2023.¹³https://www.atlantaga.gov/home/showdocument?id=52308&t=637655658776717262 The revenue for Henry County is reported from FY 2021, when its impact fees for all developments was $1,661.50. It has since been raised to $3,544.46.

The 10 largest total annual revenues derived from impact fee rates in the state:

Government	Type	Total Annual Revenue
Cherokee	County	$8,576,705.00
Forsyth	County	$8,370,510.27
Henry	County	$8,273,728.00
Atlanta	City	$7,917,865.00
Hall	County	$2,797,319.00
Dawson	County	$2,201,955.00
Canton	County	$2,147,167.00
Acworth	City	$2,101,241.00
Alpharetta	City	$2,098,746.00
Newton	County	$1,539,995.00

Municipalities with both City and County Impact Fees

Six Georgia counties, Cherokee, Fayette, Forsyth, Hall, Henry and Spalding, contain cities that assess an additional impact fee beyond what is charged by the county. A seventh, Gilmer, is authorized to charge impact fees but does not currently do so, along with the cities of Ellijay and East Ellijay. Each city that assessed an additional impact fee on top of the county fee charged its standard impact fee regardless of the type of residential unit, whether it was single-family or multifamily.

*Despite being located in four counties, only Hall County assesses impact fees.

Cherokee County levies an impact fee of $2,008.64 for single-family homes, $1,967.53 for apartments, and $1,955.50 for townhouses and condos. Woodstock levies an additional $1,509.72 impact fee for all types of residential construction. Combined county and city impact fees are $3,518.36 for single-family homes, $3,477.25 for apartments, and $3,465.22 for townhouses and condos within Woodstock. Canton charges an impact fee of $3,945.75 plus the county impact fee of $2,008.64 for a total of $5,954.39 for single-family homes. Canton’s apartment impact fee is $3,819.83 plus the county impact fee of $2,008.64 for a total of $5,787.36. Canton’s condo and townhouse impact fee is $3,782.97 plus the county impact fee of $2,008.64 for a total of $5,791.61. While Canton as a city is already in the top 10 for single-family homes and multifamily homes, with the addition of the Cherokee County impact fee it moves up the list in each category to have an even higher-ranked impact fee.

Fayette County levies a county impact fee of $600.57 for all residential buildings while Fayetteville charges an additional $3,755.07 impact fee for all residential buildings for a total of $4,355.64. Peachtree City charges an additional $4,233.78 for residential buildings for a total of $4,834.35. Brooks, Tyrone and Woolsey are each authorized to levy impact fees but do not currently charge for any residential development.

Forsyth County levies an impact fee of $3,804 for single-family homes and $2,413 for apartments, condos, and townhouses. Cumming within Forsyth County levies an impact fee $4,589 for single-family homes and $3,002 for multifamily apartments, condos, and townhouses. Cumming’s combined total county and city impact fees are $8,393 for single family homes and $5,415 for multifamily apartments, condos and townhouses. These combined rates place Cumming as one of the highest in the state.

Hall County levies an impact fee of $1,241.93 for all types of residential units and has two cities, Braselton and Gainesville, that charge additional impact fees. Braselton levies a $562.39 impact fee for a total of $1,804.32, and Gainesville has an additional $2,802.91 impact fee for a total of $4,044.84.

Henry County levies an impact fee and has three cities, Hampton, McDonough and Stockbridge, that charge additional city impact fees. Henry County recently raised its impact fee to $3,544.46, compared to the previous year’s fee of $1,661.50. Hampton has an additional $229.15 impact fee for a total of $3,773.61. McDonough has an additional $2,209.16 impact fee for a total of $5,753.62. Stockbridge has an additional impact fee of $2,420.92 for a total of $5,965.38.

Spalding County levies an impact fee of $1,736.8438 outside Griffin and $1324.2490 within Griffin’s city limits. It has two cities, Orchard Hill and Sunny Side, that are authorized to levy impact fees but do not currently charge them.

Conclusion

This study is intended to be a resource for citizens, developers and policymakers to access impact fee figures and trends across Georgia. By providing a comprehensive list of impact fees and revenues in one place, we hope to achieve greater transparency of rates and collection of impact fees as more jurisdictions consider both implementation and the increase of existing rates.

We hope comparisons can be more easily drawn and that discussions around impact fees and their purposes can be more based in facts and figures. As certain counties like Gilmer consider levying an impact fee for the first time, and Atlanta has scheduled staggered increases of its impact fee, we hope this data can help inform discussion on these proposed changes. These data will also allow comparisons between Georgia and other states that levy impact fees so that regional and national discussions on impact fees are easier.

The Georgia Public Policy Foundation’s next study on impact fees will examine the cost burdens of impact fees to consumers relative to their incomes. We will also look at the trend of increasing impact fees, particularly the arms race of increasing impact fees of areas in the Atlanta metropolitan area. Finally, we will analyze good and bad examples of transparency, how the impact fees are spent, and whether they are encouraging or inhibiting smart growth and development.

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For local governments wishing to provide an update to their impact fee rates, please email

Endnotes

• 1
  https://rules.sos.ga.gov/gac/110-12-2
• 2
  http://ga.elaws.us/law/section36-71-1
• 3
  https://www.dca.ga.gov/sites/default/files/guide.difa_.pdf
• 4
  https://landmatters.wordpress.com/peter-olson-articles-at-land-matters/the-use-of-zoning-conditions-and-impact-fees/
• 5
  http://ga.elaws.us/law/section36-71-5
• 6
  https://digitalcommons.law.uga.edu/landuse/4
• 7
  http://ga.elaws.us/law/section36-71-6
• 8
  https://www.dca.ga.gov/sites/default/files/local_government_impact_fee_programs_as_of_january_1_2021.pdf
• 9
  https://library.municode.com/
• 10
  http://ga.elaws.us/law/section36-71-8
• 11
  See Appendix.
• 12
  https://www.statista.com/statistics/456925/median-size-of-single-family-home-usa/#:~:text=Median%20size%20of%20single%20family%20house%20in%20the%20U.S.%202000%2D2020&text=The%20average%20single%20family%20house,2%2C261%20square%20feet%20by%202020.
• 13
  https://www.atlantaga.gov/home/showdocument?id=52308&t=637655658776717262