Designing Incentives that Strengthen Local Capacity for Land Development with Open Space and Healthy Ecosystems: Environmental Impact Fees

EPA Grant Number: R828629
Title: Designing Incentives that Strengthen Local Capacity for Land Development with Open Space and Healthy Ecosystems: Environmental Impact Fees
Investigators: Swallow, Stephen K.
Institution: University of Rhode Island
EPA Project Officer: Hahn, Intaek
Project Period: January 1, 2001 through February 1, 2003 (Extended to December 31, 2004)
Project Amount: $103,821
RFA: Market Mechanisms and Incentives for Environmental Management (2000) RFA Text |  Recipients Lists
Research Category: Environmental Justice


The purpose of this research is to develop a theoretical framework for using impact fees to cause land markets to recognize the value of open space and undeveloped lands in providing for the quality of life for communities near the fringe of urbanization. The project represents a first step and will yield a mathematical model to provide economists with a good foundation on which to advise land use planners, municipal officials, and conservation agencies with respect to viable alternatives to mitigate the losses of open space amenities as land is developed.


This research contributes a new dimension to ongoing research concerning the economic value of conserving ecosystem services and watershed resources and the project anticipates developing a practical foundation for linking these conservation values to market incentives for land use. The objectives are: (1) To evaluate the impact fee concept as an incentive for land developers to compensate for the impacts of development on the environmental or landscape character of their community, including impacts on open space, rural amenities, and associated ecosystems; (2) To evaluate the obstacles to and advantages of an impact-fee incentive system in relation to alternative market or incentive-based approaches for local management of land development; and (3) To evaluate the role of federal, state, and local financing of open space conservation in affecting municipal incentives for open space conservation and the performance of impact fees related to local land development.


The investigator will use an analytical or mathematical framework to identify components of an economically efficient impact fee system to encourage land development that recognizes how open space contributes to land values and a community's quality of life through: (a) changes in market value of land; (b) impacts on rural and open space amenities; (c) the role of land uses in local ecosystems; and (d) spatial and temporal factors that change the scarcity of amenities or the conservation biology of land use. While taking a microeconomic theory approach, the project will draw on linkages between economics and ecology and conservation biology. The economic analysis will extend existing models of urban growth, municipal infrastructure impact fees, and land rent and price modeling in developing areas.

Expected Results:

Analysis is expected to show that environmental impact fees will increase land values for land developed after the implementation of an impact fee policy, although values of undeveloped land may or may not increase. These results will reflect a balance between gains from higher quality of life resulting from land conservation and costs associated with the payment of compensation for lost public values. The project strives to provide a new incentive-based tool for consideration by local land use decision-makers, and may become part of technical assistance within Grow Smart initiatives or an agenda promoting livable communities. Non-federal beneficiaries include municipal governments, town and land use planning professionals, state legislators addressing urban sprawl, private non-profit or municipal land trusts, or officials concerned with managing municipal or state bond issues for open space conservation programs. The research contributes to developing new and economically effective tools for open space conservation and management of urban growth or sprawl by state or local jurisdictions.

Publications and Presentations:

Publications have been submitted on this project: View all 4 publications for this project

Supplemental Keywords:

community-based, sustainable development, Northeast,, RFA, Economic, Social, & Behavioral Science Research Program, Scientific Discipline, Ecosystem Protection/Environmental Exposure & Risk, Ecosystem/Assessment/Indicators, Ecosystem Protection, Economics, Ecology and Ecosystems, Urban and Regional Planning, Market mechanisms, financial mechanisms, urbanization, environmental quality, mathematical model, ecological exposure, healthy ecosystems, sustainable development, municipal incentives, incentives, decision making, land use planners, conservation, community based, land management practices, ecosystem health, environmental impact fees, ecological benefits, environmental economics, land use, land management

Progress and Final Reports:

  • 2001 Progress Report
  • 2002 Progress Report
  • 2003
  • Final Report