تاثیر هزینه های توسعه و استخدام

Development impact fees have sparked considerable controversy as they have spread rapidly in usage throughout the United States. One contentious issue is the effect that these fees have on local economic development. While some scholars have argued that impact fees attract jobs by reducing developers' uncertainty, the development community maintains that they operate as an excise tax, reducing commercial development and driving away jobs. We use Florida county level panel data, from 1990–2005, to investigate the relationship between private employment and different types of impact fees. We find that commercial fees and school fees have countervailing effects, with the former repelling jobs and the latter attracting jobs. These results are consistent with our theory driven expectations. Our investigation also suggests that differences between our results and those obtained in prior studies can be attributed to two factors: the latter studies' violation of the condition of strict exogeneity required for consistent estimation and a failure to account for differential employment effects across various types of impact fees.

Increasingly throughout the United States property tax revenues are insufficient to fund public infrastructure expansions necessitated by new development. Because raising property tax rates has politically become increasingly difficult, many local governments have chosen to address revenue shortfalls by adopting various types of development impact fees over the past few decades.2 Impact fees are one-time levies, predetermined through a formula adopted by a local government unit, that are assessed on a property developer during the permit approval process. They are earmarked for specific public services, bridging the gap between the cost of infrastructure expansions and revenue streams that will help pay for them. The services covered vary from jurisdiction to jurisdiction, but routinely include road, water, and sewer. Other services less frequently included are schools, libraries, police, fire and parks.3 For each service there is a separate fee schedule, and developments pay fees only for services they directly consume (e.g., commercial developments are not included under a school impact fee schedule). Many controversial issues, including concerns over how impact fees affect the availability and affordability of housing, surround the use of impact fees.4 However, from the point of view of local governments considering implementing fees, perhaps the most important issue is the effect that the fees have on local economic development. Critics, who come mainly from the development community, argue impact fees are an excise tax on development, driving investment and job growth to other jurisdictions where fees are lower or do not exist.5 Proponents of fees make the case that they encourage development by decreasing developers' uncertainty surrounding two key elements affecting the profitability of their projects (Nelson et al., 1992 and Nelson and Moody, 2003). First, impact fees may expedite project approval. The project approval process can be long and expensive to the developer. In the absence of development fees, funding for new public infrastructure typically comes from the property tax. Hence, depending on the magnitudes of the services required and the tax revenues generated by the new development, existing property owners may face higher property tax burdens when growth occurs. Impact fees reduce or eliminate this risk, presumably making local government more willing to approve new development, and to do so expeditiously. Second, because impact fees are earmarked, they may reduce the uncertainty that developers/employers have over whether the infrastructure they need will be provided by local government or provided in a timely fashion. Developers may view impact fees as a contractual agreement with local government that gives them some assurance that the infrastructure services they need will be provided. Only two studies (having much in common, as discussed more fully below) have empirically investigated the above issue, focusing on the effect that impact fees have on the local jurisdiction's private sector employment growth (Nelson and Moody, 2003 and Jeong and Feiock, 2006). Both studies conclude that impact fees increase the number of jobs within the jurisdiction and attribute the employment growth to a reduction in developer uncertainty. However, neither study adequately deals with the concern that impact fees are endogenous to employment growth. Even casual observation suggests that fees are more likely within those jurisdictions where strong growth has created a deficit in their stock of public capital. The positive relationship observed by these studies between fees and employment growth may therefore be the result of reverse causation. The purpose of this paper is to present the results obtained from estimating panel data models that relate private sector job growth to three types of impact fees: commercial, school, and water/sewer. We exploit the panel nature of our data to control for potential endogeneity and multiple sources of unobserved heterogeneity. In making these improvements, we find that higher commercial fees reduce employment, while the opposite is true for school fees. Water/sewer fees are not found to have a significant effect in either direction. The negative effect that commercial impact fees have on employment suggests that these fees impose costs on developers that exceed any benefits that they may accrue from reduced uncertainty. Our finding that school fees increase employment is consistent with our earlier work showing that residential impact fees stimulate the construction of both single-family and multi-family housing construction (Burge and Ihlanfeldt, 2006a and Burge and Ihlanfeldt, 2006b). More homes mean more people, which bring benefits to commercial developers/employers in the form of greater customer demand and labor supply. In addition, commercial developers bear no costs from school fees, because they are exempt from paying them.

Development impact fees are a relatively new source of revenue for local governments. While the number of cities and counties with fees is growing, this growth has been stunted by the real estate development community's opposition to fees. In part, this opposition is based on the belief that impact fees repel commercial and residential development by acting as a development tax, resulting in a lower property tax base and fewer jobs. Our review of the literature found two studies that had investigated the effect impact fees have on private sector employment. Both studies conclude that the development community's prognostication is wrong—impact fees do not reduce the number of jobs, but in fact actually cause an expansion in employment by reducing developer uncertainty. Based upon these findings, impact fees would seem to be the ideal funding source for local public infrastructure. Impact fees eliminate the negative externality from new development imposed on existing property owners from higher property taxes and they expand the community's economic base. However, our results cast suspicion on the conclusions of these studies. We first demonstrate that previous results may have been biased towards finding a positive relationship between fees and employment due to feedback from employment growth to higher future impact fees. We then report the results obtained from a first differenced model that is well grounded theoretically, allows for employment to respond to changes in fees using the appropriate lag structure, and satisfies the strict exogeneity condition required for consistent estimation. We find that the equilibrium level of employment is unaffected by water/sewer fees, grows with increases in school fees, and declines with increases in commercial fees. The contrasting results obtained for school and commercial impact fees are easy to rationalize. Direct monetary costs are imposed on commercial developers by commercial fees. While these fees may reduce the level of uncertainly over future development patterns, lower expected future property taxes, and increase the likelihood of project approval (or simply reduce regulatory costs), our findings suggest that these employment-enhancing effects are dominated by the negative effect that the fees themselves have on employment by raising the cost of commercial development. School fees, on the other hand, impose no direct costs on commercial developers and also carry the possible benefits of property tax savings and/or improved levels of public service provision. Additionally, we outlined how our previous work found school fees to stimulate housing construction. More homes bring more people, and more people bring more jobs. From a policy perspective, our results suggest that the impacts CF and SF have on a community's job base be considered before adopting or raising these fees. How these impacts are viewed by the community will depend on its objectives. For example, CF may not be as desirable within communities that seek to maintain or expand employment. On the other hand, they become more favorable if the community wishes to repel commercial activity, perhaps out of a desire to maintain its residential character. SF are consistent with a goal to increase the number of jobs, but communities may or may not desire the accompanying population growth. Politically, it may be difficult to adopt just one of the two types of fees. Some support for this conjecture is provided by our data. Counties with CF also tend to have SF and, although we find changes in CF and SF are uncorrelated, we also find their levels are highly correlated. If SF and CF are in fact an ‘all or nothing’ proposition for local governments, our results suggest that the ‘all’ seems to have no adverse effect on the long-run equilibrium level of jobs. However, while commercial and school fees may have offsetting effects on the level of employment, again it may matter that school fees increase the number of jobs, in part, by expanding the county's population. Our research can be extended in a number of ways. One important avenue for future inquiry is to investigate whether the effects of impact fees on employment vary by industry group or between large and small communities. Industry type may matter because the dependence on local public infrastructure varies, for example, between manufacturing and services. If impact fees do reduce developer uncertainty, they may have less of a negative effect on manufacturing jobs than upon other types of jobs. Community size may matter because as the size of the jurisdiction increases relative to the size of the overall metropolitan area, it possesses greater monopoly power. Hence, the demand for commercial space and the demand for labor may be less elastic within larger cities, resulting in smaller job loses from an increase in commercial impact fees.