IEDC Real Estate Development & Reuse Practice Exam 2026 - Free Real Estate Reuse Practice Questions and Study Guide

Funding developments through impact fees is intrinsically linked to the necessity for capital improvements that support those new developments. When a community assesses impact fees, it is fundamentally evaluating the additional infrastructure and services—such as roads, parks, schools, and utilities—that need to be enhanced or established as a result of new development.

These fees are intended to ensure that the costs incurred by the community due to the additional demand placed on public services and infrastructure by new developments are adequately addressed. Capital improvements, therefore, are the backbone of this funding mechanism, as they directly correlate to the growth and sustainability of the community in accommodating new residents or businesses.

Implementing impact fees without the assurance of corresponding capital improvements would undermine the very purpose of these fees, which is to maintain the quality of life and service levels within the community as it grows. Additionally, the other options do not directly relate to the structural or financial requirements inherent in establishing suitable impact fees.