| Response
to “Impact Fees and Housing Affordability” by
Vicki Been
William A. Fischel
Dartmouth College
Professor Vicki Been has provided an excellent survey of
what we know about impact
fees. Her economic analysis is sound and well balanced, and
she has surveyed the major
works in this area with insight and institutional nuance.
Her call for empirical work that
takes into account the benefits, as well as costs, of exactions
is especially important to
heed. To that end, the focus of this comment is why thinking
of exactions as fees for
service rather than as taxes is better. Been’s analysis
presents both views about the nature
of exactions, but she leans toward viewing exactions and impact
fees as prices. I want to
second that inclination and explain why it matters.
A tax is an obligation imposed by the government on owners
of assets and income streams
within its jurisdiction. Most taxes are uniform in their effect
in this minimum sense: they
treat people and assets that are economically identical the
same. In this respect alone, it
could be argued that land use exactions are different from
taxes in that similar activities
can easily be subjected to different exactions. Exactions
are sometimes negotiated with
government officials, and, for what are often legitimate reasons,
different developers may
end up paying different exactions for otherwise similar projects.
|
| 
