Impact fees make it harder for prospective homebuyers with low to moderate incomes to "fulfill the American dream" and become homeowners. Homebuyers with limited means can easily be pushed out of the home-buying market if an impact fee is associated with a development. And, because in most cases an impact fee is almost always a flat fee, it affects buyers of affordable housing far more severely than the buyers of high-end homes.

Impact fees also can cause gentrification of communities through increased housing costs, where the poor and working class have difficulty finding affordable housing. This also can have a greater effect by putting more demands on state and local governments for social services. In addition, many homebuyers would be driven to adjoining counties and communities, where homes are often more affordable, negatively impacting economic growth in the core urban counties, and transferring urban problems to more rural areas that are least able to cope with new urban problems.

Instead of restricting growth and development to desired areas, impact fees simply push that activity farther out to jurisdictions without the tax, contributing to suburban sprawl. As a growth management tool, impact fees are a complete failure.

In terms of economic development, impact fees are also a negative because they pose a hindrance for an important element of economic development -- construction. Impact fees also constrain local economic development, serving as a de facto "tax" on capital, stifling investment and driving job growth to other fee-free jurisdictions. The higher cost of housing, new and existing, that would result from an impact fee would make an area less attractive for industrial recruitment, because the availability of affordable housing is often a very important factor in site selection decisions.

Developers do not pay impact fees; most make it a "pass-along cost" and the buyers or investors are the ones who have to pay the fee. The myth is impact fees are paid by newcomers (future constituents), not current constituents. The truth is impact fees are paid by anyone who impacts government services when constructing a new home or business, whether they just moved into town or have lived there all of their lives.

Across our state, many, if not most, new home sales are to existing South Carolina residents. It is true that an impact fee can provide a revenue source for a local government to use in order to pay for costs associated with developments. But, when looking at all the negatives associated with impact fees, it is simply a bad idea to put impact fees into place.

Impact fees are not the answer to the "how to provide property tax relief" riddle. If you have those fees in place, it will hurt local economic development efforts, cause more concerns with growth management at the local level and hurt the "average" citizen further.