Land Use & Zoning

Impact fees are charged by local governments to:

ACompensate property owners for downzoning

BPay for public infrastructure improvements needed to serve new development✓ Correct

CFund property tax reductions

DCompensate adjacent property owners for decreased values

Explanation

Impact fees are one-time charges assessed by local governments against new development to fund public infrastructure improvements (roads, parks, schools, utilities) required to serve the new development.

People Also Study

Key Terms to Know

Zoning

Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.

Private Mortgage Insurance (PMI)

Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.

Transfer Tax

A tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.

Variance

Official permission to use land in a way that does not conform to the applicable zoning ordinance, granted by a zoning board when strict enforcement would cause undue hardship.