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Transportation Impact Fee Ordinances

Transportation impact fee ordinances provide funding for off-site transportation capital improvement projects associated with new development within determined transportation service areas established by municipalities.

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West Bradford Township is addressing westbound pass-through traffic at the roundabout at Stargazers Village by using transportation impact fee funding to widen the northern half (westbound) to two lanes and widening West Strasburg Road for a separate right-turn lane onto Shadyside Rd.

How it Works

Current roadways may not be sufficient to accommodate additional traffic generated by residential and non-residential development in a community. The Municipalities Planning Code (MPC) enables municipalities to charge developers transportation impact fees so new developments essentially pay to accommodate the traffic they generate. Revenue from impact fees can only be used to fund certain components of the improvements including preliminary engineering, right-of-way acquisition, relocating utilities, construction (road construction, widening, traffic signage, traffic signals, culverts, bridges, and pavement markings), and a contingency. Note that impact fees can only be used to fund highway improvements (i.e., impact fees cannot be used to fund sidewalks, streetscapes, trails, etc.).


When a municipality with significant growth potential adopts a transportation impact fee ordinance, they can realize the following benefits:

Funding for Roadway Improvements

Transportation impact fees leverage private money to fund public infrastructure.

Support Infrastructure for Growth

Funding for infrastructure can often be a limiting factor that discourages growth or turns public opinion against it. With a transportation impact fee ordinance in place, the burden of supporting the transportation infrastructure is on the developer, not the public.

Support Redevelopment of Brownfields and Village Centers

Transportation impact fees can be a key part of a master plan to support revitalization of central business districts, village centers, and other population centers.

Reduced Congestion from New Development

By proactively addressing anticipated traffic from new development, the transportation impact fee implementation process can mitigate congestion from new land development that may otherwise go unchecked.

Expedite Improvements to State-Owned Roads

While transportation impact fees cannot be used to fully fund improvements to state-owned roadways (state roads are only eligible for 50 percent of impact fee funding), they can be used to leverage state and federal funds to expedite needed improvements for development or redevelopment.

Use as a Tool to Support A+ Housing Targets

Developers can be credited to reduce incurred transportation impact fees if the development includes affordable housing. Promoting this may help facilitate the development of affordable housing in alignment with Landscapes3.

Upper Uwchlan Township adjusted their transportation impact fee ordinance in 2015 to include a transportation service area of maximum 7 square miles, as their previous ordinance had a smaller service area.

Get Started

Implementing transportation impact fees takes time, money, and energy. Additionally, documentation for the process must be prepared by qualified professional traffic engineers. If the potential benefits significantly outweigh the costs, a municipality should seriously consider adopting impact fees into their code. To determine whether an impact fee is appropriate, a municipality should consider its future development potential based on its comprehensive plan. PennDOT recommends that, generally, for an impact fee to be worthwhile, a municipality's development projections should reflect at least 50-100 residential units per year and 50,000-100,000 square feet of non-residential development per year for at least five years. For instance, rural townships expecting limited growth due to agricultural and open space easements would probably not benefit from implementing an impact fee. The same goes for municipalities that are nearly or completely built out.

The MPC's process is the only way by which municipalities can implement and change impact fees. This process mandates the steps to be undertaken before an ordinance is enacted. The process is guided by the Transportation Impact Fee Advisory Committee (TIFAC) which is appointed by the municipality's governing body.

The process includes the completion and adoption of three reports: a land use assumptions report, a roadway efficiency analysis report, and a transportation capital improvements plan. Not only is this documentation legally necessary for the adoption of an impact fee, but they are also valuable for understanding the current strengths and deficiencies of the municipality's roadways. These required documents are detailed below:

Land Use Assumptions Report

This report serves to describe the existing land uses and the transportation corridors within the planned study area. It also serves to project changes in land use and development over the next five years, at minimum.

Roadway Sufficiency Analysis Report

This report identifies study intersections and roadway segments that will be most affected by projected development, peak hours for roadway capacity analysis, roadway capacity analysis for projected conditions after land development, traffic volumes for existing and projected conditions, and a roadway sufficiency analysis to determine the roadway capacity required for the projected post-development conditions. The roadway sufficiency analysis itself must be completed by a qualified traffic engineer. Transportation impact fees can be used to partially reimburse the municipality for the roadway sufficiency analysis.

Transportation Capital Improvements Plan

This plan includes the identification of improvements at study locations from the roadway sufficiency analysis, the preliminary cost estimates for these improvements, the schedule for completing these improvements, potential funding sources for improvements, a capital improvements plan report, and the calculation of the fee itself to be adopted in the transportation impact fee ordinance.

All three studies can be completed in-house by the municipality itself, or by a contracted qualified consultant.

Though funds raised through the transportation impact fee can only be used for vehicular roadway improvements, Landscapes3 provides guidance for transportation capital improvements to ensure that improvements address all potential transportation modes to increase accessibility and connectivity.


Development Potential

The most important consideration is the municipality's development potential. If the municipality does not anticipate substantial development or redevelopment, then it may not be a good candidate for a transportation impact fee. Adopting an impact fee is a process that involves time, money, and energy for components like studies and public meetings. It is unwise to pursue an impact fee if there is not enough potential development to make it worthwhile.

Transportation Service Area

When implementing a transportation impact fee, the governing body must delineate a transportation service area. This should include the areas with the capacity for future development and need for transportation improvements. If this area needs to be redefined after the impact fee is adopted, the entire implementation process begins again. The transportation service area has a maximum area of 7 square miles, so multiple service areas may be required to fully cover a municipality. Note that trips generated in one service area cannot be used in the calculation of the impact fee in another service area. A preliminary service area can be designated as part of the roadway sufficiency analysis, but the establishment of the service area is required to be included in the capital improvements plan.

Funding Assistance for Required Studies

Funding for the required studies of the transportation impact fee implementation process can be found through the Department of Community and Economic Development's Land Use Planning and Technical Assistance Program or other applicable programs. The Chester County Planning Commission's Vision Partnership Program can be used to fund the land use assumptions report.

Planned Capital Improvements by Other Agencies

Municipalities should consider planned improvement projects by state and federal agencies while assessing a transportation impact fee's feasibility in case substantial local funding is not required to address capacity needs.

Listed Projects

The transportation impact fee may only be used to fund projects listed in the transportation capital improvements plan within the transportation service area and within the planning period (recommended by PennDOT to be 10 years). Needed improvements identified in the existing and projected pre-development conditions are not eligible to be funded with impact fees. Careful consideration should be given to what projects are listed in the plan so that it is realistic.

Interim Impact Fees

It is highly recommended to implement an interim impact fee while the process to establish the ordinance is being completed. The MPC permits a maximum interim impact fee of $1,000 per peak hour trip.


West Whiteland Township is using funds raised by their transportation impact fee to reroute Ship Road into a couplet to address congestion issues at the intersection of Ship Road and Lincoln Highway (US Route 30 Business). While the impact fee can only contribute to financing the roadway improvements for vehicular traffic, the township is also including a trail in its plan, demonstrating a municipality's ability to promote multi-modal transportation in conjunction with transportation impact fee improvement plans.

West Whiteland

There are currently 16 municipalities in Chester County with adopted transportation impact fee ordinances.

West Whiteland Township has collected approximately $750,000 from their transportation impact fee. Its enabling ordinance includes the three required documents: the land use assumptions report; the roadway sufficiency analysis; and the capital improvements plan. These documents were prepared by the township's contracted planner and traffic engineer, respectively. It also includes the administration of the impact fees, acceptable methods of payments, exemptions, methodology for impact fee calculation, and other provisions as required by the MPC.

Upper Uwchlan

Upper Uwchlan Township adjusted their transportation impact fee ordinance in 2015 to include a transportation service area of the maximum 7 square miles, as their previous ordinance had a smaller service area.

Resource Links

Pennsylvania Department of Transportation

The Transportation Impact Fee Manual details the steps to implement and enact a transportation impact fee ordinance. It also includes model ordinances and resolutions, and guiding checklists for each step of implementation.

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