Mostly landowners. There is general agreement among economists that much of the cost of impact fees on new development are ultimately born by landowners who have to accept lower prices for their land from developers who now face a new expense.
Most of the research on impact fees is focused on fees to finance public services or infrastructure. The economics of these fees are slightly different because they are seen as funding services that the buyers of homes would value. There are empirical studies showing impact fees resulting in higher home prices and other studies showing fees driving down land prices instead. Researchers debate whether any home price increases are the direct result of the fees or the indirect result of increased demand driven by the infrastructure improvements that the fees finance.
A 2003 review* of 27 academic papers on the topic concluded that where buyers and developers have other options:
“the cost of the impact fee is pushed backward to sellers of land … and sellers must reduce the sale price of land in such scenarios.”
