What are fees called that are imposed on developers to fund necessary improvements to off-site infrastructure?

Development impact fees are charges levied on developers to help fund the public infrastructure improvements that are necessitated by new development projects. These fees are designed to ensure that the costs associated with expanding or enhancing infrastructure—such as roads, schools, parks, and utilities—are shared by those who benefit from the new development, rather than being solely burdened on the existing community.

Such fees are typically calculated based on the projected impact of a development, which can include increased traffic, demand for public services, and additional environmental considerations. By imposing these fees, municipalities can better manage growth while simultaneously ensuring that necessary services and infrastructure are in place to accommodate new residents or businesses, ultimately contributing to more sustainable development practices.

In contrast, special district assessments are typically used for funding improvements within a specific area rather than off-site infrastructure. Public enterprise revenue bonds are used to fund self-supporting revenue-generating projects, while general obligation bonds are issued by municipalities and are backed by the full faith and credit of the issuing body, often requiring voter approval. Both these bond types do not specifically apply to fees collected directly from developers for infrastructure improvements resulting from new developments.