New Castle County Updates Impact Fees For First Time In Nearly Two Decades

Executive Marcus Henry has signed into law to raise current impact fees to account for inflation and establishes a new system for ongoing updates tied to the Consumer Price Index (CPI). (Photo by David McBee)

Executive Marcus Henry has signed to raise current impact fees to account for inflation and establish a new system for ongoing updates tied to the CPI. (Photo by David McBee)

New Castle County Executive Marcus Henry has signed into law a major overhaul of how the county calculates and applies impact fees on new development, the first significant update to the policy in nearly two decades.

The ordinance updates Article 14 of the New Castle County Code to raise current impact fees to account for inflation and establishes a new system for ongoing updates tied to the Consumer Price Index (CPI).

“The County introduced impact fees over 25 years ago. We believe that this adjustment, the annual review of the fees, and the required 5-year study will allow New Castle County to account for the impact new buildings will have on our County and will help fund the necessary infrastructure,” said County Executive Marcus Henry.

Under the legislation, future fee increases will be reviewed annually based on the CPI and studied every five years, with the first study scheduled for completion by January 2027.

“This ordinance also puts forward additional parameters to ensure we are moving forward in an equitable way for affordable housing.”

Impact fees are charges imposed on new developments to help fund the infrastructure and public services needed to support population growth. Since the adoption of the Unified Development Code in 1997, the county has only updated one component of the fee structure — the fire impact fee — in 2006.

The ordinance includes exemptions for certain types of development to encourage housing affordability and smart growth. These exemptions apply to:

Workforce dwelling units
Moderately Priced Dwelling Units
Low Income Housing (less than 100% Area Median Income)
Redevelopment or Brownfield Development
Development on land in the Publicly Conserved Lands & Parks (P) zoning district

“These fees are a fair and equitable mechanism to ensure that new development participates in the cost of new and expanded infrastructure needed to support our residents,” said County Director of Land Use David Culver.

The latest increase reflects CPI adjustments from 1997 through 2023, bringing the fee schedule in line with modern infrastructure needs and inflationary pressures.