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This document is disseminated under the sponsorship of the U.S. Department of Transportation (USDOT) in the interest of information exchange. The U.S. Government assumes no liability for the use of the information contained in this document.
The U.S. Government does not endorse products or manufacturers. Trademarks or manufacturers' names appear in this report only because they are considered essential to the objective of the document. They are included for informational purposes only and are not intended to reflect a preference, approval, or endorsement of any one product or entity.
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide information and clarity to the public regarding existing requirements under the law or agency policies. Value capture techniques and policies are often implemented outside of Federal funding or regulatory requirements.
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Form DOT F 1700.7 (8-72)
Reproduction of completed page authorized
The Federal Highway Administration (FHWA) would like to express appreciation to the members of its Value Capture Implementation Team and acknowledges their valuable contribution of expertise and guidance throughout the development of this report.
State and local governments often struggle to mobilize the necessary funds to maintain, rebuild, and expand their local transportation networks. Planned projects often face funding hurdles that may result in projects being delayed or cancelled altogether, leaving important safety and mobility objectives unmet.
Value capture refers to a set of techniques that allow monetizing the appreciation in real property values that is triggered by infrastructure improvements. Such monetization enables the generation of future revenues that can be leveraged up front to help finance current or future infrastructure improvements. Under the right circumstances, this may allow practitioners to close funding gaps and accelerate project delivery, as well as trigger much needed economic development to provide livable communities, create jobs, and improve environmental conditions.
Development impact fees (DIF) are one-time charges applied to new developments that local agencies formally establish to pay for additional off-site public improvement capacity needed by the new developments. The charges can cover a wide variety of public services and are based on a general formula that applies equally to all new developments. The charges are proportional to the incremental capacity needs of each development.
This primer is based on literature reviews, interviews, case studies, and lessons learned from practicing agencies. It introduces various DIF techniques and explains how they can provide a gap funding source to help maintain and improve road networks and other critical infrastructure needs. It also provides several cases to illustrate how public agencies have approached instituting and managing DIF programs.
