An impact fee is a one-time charge assessed on new development, intended to help fund the infrastructure improvements — roads, schools, utilities, parks — needed to accommodate the additional demand that development creates. The underlying idea is that new growth should help pay for the infrastructure capacity it requires, rather than placing the full cost burden on existing taxpayers alone. Impact fees are typically charged at specific points in the development process, most commonly at building permit issuance, and the amount is generally calculated based on the type and scale of development — a formula-based approach that considers factors like number of housing units, square footage, or anticipated traffic generation for commercial projects. Different jurisdictions calculate and apply these fees differently, and not every jurisdiction charges impact fees at all, so it's important to check current requirements for the specific jurisdiction where a project is located rather than assuming a fee structure based on other areas. These fees can represent a meaningful cost that developers need to factor into project budgets from an early stage, since they're not always intuitive or easy to estimate without checking current local fee schedules directly. Underestimating or overlooking impact fees during initial project planning can create budget surprises later in the development timeline. For developers evaluating a potential project, checking current impact fee schedules with the relevant local planning or development services department early in the due diligence process — ideally before finalizing land acquisition — helps ensure these costs are properly reflected in the overall project pro forma, rather than being discovered as an unexpected cost after significant planning work and capital commitment has already occurred.