Impact Fee - in Lieu Fee

In Lieu Fee

The use of impact fees originated in environmental law practices and in lieu fees. In Lieu fees are different from impact fees and are not as flexible because they relate only to required dedications where they can be appropriately used. Because the use of the in lieu fee may not always be efficient, planners and cities are now turning to impact fees as a more appropriate way to collect money for facilities and services. Impact fees can be more easily applied to needed infrastructure or facilities while lieu fees cannot. Impact fees can be applied before new development is started or completed, which may allow costs to be transferred to future residents in the area. Another advantage of using an impact fee compared to the in lieu fee is that it can be applied to any new construction from single family homes, apartments, and even commercial development. In lieu fees that may not always be as easily applied to any specific zone. Finally, impact fees can be implemented earlier than in lieu fees so that the capital need matches the need for services.