Ada County Highway District increases impact fees by 66%

Ada County officials have significantly increased development impact fees to pay for transportation projects, passing an ordinance to charge developers more to build starting in 2026. One silver lining, however, is that they rejected a controversial proposal to go to a two-area fee zone.

Public officials say higher transportation impact fees are needed to build out the road network to mitigate the traffic impact from growth. They estimate that out of $2.3 billion in transportation needs, $1.6 billion is impact-fee eligible (impact fees can only be used on specific projects like road expansions and intersection improvements).

Two Alternative Plans for Raising Impact Fees

Prior to 2012, Ada County was divided into four subareas for calculating impact fees. After the reunification, officials imposed a flat, $3,047 fee the following year on every developer rather than four separate fees. Public officials have only moderately increased that fee since to about $3,500 per single-family home (SFH) developed in 2024.

Ada County Highway District explored dividing the county into two in order to charge West Ada County developers more for transportation projects than East Ada County developers. After intense public feedback, officials opted to continue moving forward with the single fee zone instead.

However, under the adopted Ordinance 254, impact fees for SFH development will increase by 66% to more than $5,800. Fees on Accessory Dwelling Units, units built to help reduce the housing shortage, will increase 68% under the proposal. Impact fees for other land uses would also increase for the vast majority of uses. Multifamily impact fees are currently undetermined.

Ordinance #254 – Passed 4 to 1

Under the rejected two-area plan, Ada County would have been divided into two areas for traffic impact fees, with the county largely separated by Cole Road and the Wye Interchange. Boosters of this plan argued that since most of the projects are in West Ada, it is ‘fair’ to charge a higher impact fee ($1.3 billion in project needs versus $339 million).

The alternative plan would have a SFH development West of Cole cost of nearly $6,400 per SFH, an 83% increase. The same house developed on the East side of Cole would have seen a 27% increase to just under $4,500, for comparison.

Ordinance #254A – Not Passed

The fees extend beyond housing, as daycares, restaurants, and automobile-related companies (sales, parts, etc.) would see significant increases. Coffee shops would see a decrease.

Splitting the county into subareas had posed significant challenges in the past, leading to the reunification of the county for impact fees in 2012. After all, the ACHD noted the county “had trouble raising funds for projects” under the subarea model, a problem alleviated by the one-county boundary. Fracturing this boundary again may reintroduce this problem to the region.

While it is good news that ACHD officials opted for a single, one-county zone, the staggering increase to impact fees will likely lead to inflation for consumers in the form of higher prices: from housing prices to auto repair to buying groceries.  

Further, ACHD officials have adjusted one input into the impact fee model significantly. In the draft ordinance proposals, the data show average trip lengths increasing from 6.17 miles in 2024 to 7.73 miles, a 25% increase in the input value, and therefore, an automatic increase in costs.

More investigation should be done on this simple input to see if it reflects reality, as VMT per capita and trips per capita have continued to decrease across the United States, not increase.

In short, a transportation impact fee is an important part of funding improvements to keep traffic flowing. A “growth pays for growth” nexus is a tried-and-true system for funding capacity improvements to fully mitigate the impacts of land uses.

Yet such large and drastic cost increases may make Ada County less desirable for development and will likely lead to higher prices for the end consumer, thereby making the region less attractive overall as a place to live, work and play.