Utah’s latest impact-fee audit examined two distinct issues: whether the charges show up in home sale prices and whether local governments follow the rules for collecting and spending them. Its analysis of 10,000 sales across 16 cities over three years found no statistically significant relationship between fees and sale prices. A separate review found compliance problems in more than half of nine jurisdictions examined in depth.
The analysis, conducted jointly by Utah legislative auditors and the Kem C. Gardner Policy Institute, found no statistically significant relationship between impact fees and final home sale prices, according to The Salt Lake Tribune. Municipalities, counties and special districts collect these one-time payments from developers at the building-permit stage to fund infrastructure affected by growth, including roads and water systems. Builders may factor fees into project costs, but the audit’s sales analysis found no clear link between fee size and what buyers ultimately paid.
The dollar amounts vary widely from city to city. Impact fees for a 2,000-square-foot home in Kaysville, a Davis County city of about 33,000 residents, total around $11,000. In Grantsville, the second-most populous city in Tooele County with roughly 16,500 residents, the same size home carries about $35,000 in impact fees. The gap reflects how impact fee amounts depend on each community's own infrastructure needs and how local officials calculate the costs new development should bear.
Auditors Flag Widespread Compliance Problems
The audit’s compliance review found problems beyond outdated planning documents. Of 41 impact-fee studies reviewed, more than half had not been updated within five years, although auditors said they should generally be refreshed about every three years. In a closer review of nine jurisdictions, more than half either spent fees incorrectly or otherwise failed to comply with state law. The newspaper’s account did not identify which jurisdictions had problems, leaving readers without a jurisdiction-by-jurisdiction breakdown.
The report said disputes over compliance could expose local governments to costly civil litigation; enforcement in this area largely relies on lawsuits rather than direct state action. Matthias Boone described impact fees as complex and technical and said Utah needs more training and accountability measures.
Lawmakers React to the Findings
Utah House Speaker Mike Schultz, a Republican representing Hooper, said the court-based accountability approach deserves closer examination. Schultz also expressed concern that administrative costs tied to impact fees may consume money that was intended for actual infrastructure rather than paperwork and compliance overhead.
Auditors made five recommendations to state agencies and lawmakers: improve guidance, training and transparency; require local governments to publish impact-fee plans and analyses online; establish a regular schedule for updating those documents; improve state-auditor oversight so annual reports consistently show project-level revenue and spending; and consider changes to how fee revenue may be used and how the system’s administrative burden is handled. The audit noted that Utah statutes provide more direction on impact fees than laws in the other states it reviewed.
Tracking Fees From Plan to Project
A January 29, 2024, alert from the Utah Office of the State Auditor described updated reporting guidance intended to help local governments track fee collections and spending by development project. That guidance speaks to recordkeeping, but the materials cited here do not specify a statutory deadline for spending fees. Salt Lake City’s parks and public lands impact-fee plan said projected growth would require additional facilities to maintain existing service levels. The city says its council approved $3.44 million in impact-fee funding for Pioneer Park in 2019, then approved another $10 million from a sales-tax bond in August 2022, according to the Salt Lake City Public Lands Department.
Developers Weigh In on the Numbers
Chris Gamvroulas, president of Ivory Development, said the large differences in fees among cities help explain why fee levels did not correspond directly with sale prices in the audit. He said fees could still affect prices over time and influence where builders pursue projects, including by making land in high-fee areas less attractive to buy.
Gamvroulas said builders may respond to higher costs by leaving out features rather than increasing a home’s price. Leah Blevins said whether a fee is excessive depends on the infrastructure needs of the city charging it. The audit’s findings indicate that factors other than impact fees have a stronger relationship with final sale prices.
How Utah's Fees Compare Nationally
Utah isn't alone in grappling with how impact fees interact with housing costs. California has higher development impact fees than any other state, according to the Terner Center, which studied impact-fee policies across a sample of 41 California jurisdictions and interviewed 22 practitioners. Recent California laws are pushing local governments there to reform impact fees to ease financial burdens on new housing and make the fees easier to understand and estimate.
The Terner Center found that most California jurisdictions studied offered fee waivers for new affordable housing developments, though some waivers depended on finding alternative funding to replace that lost fee revenue. Almost two-thirds of the jurisdictions calculated fees by square footage rather than by number of units, and while most published fee schedules, the center found the fees remained difficult for developers to estimate in practice — a complexity challenge that mirrors what Utah auditors flagged at home.
