What Are Impact Fees and How Do They Affect Homeowners?

When preparing to buy or build a new home, most people focus on location, floor plans, and features that fit their family’s lifestyle. What many don’t realize is that communities also rely on something called an impact fee to keep neighborhoods well supported with the infrastructure they need.

Impact fees may not be the most talked-about part of buying a home, but they play an important role in how communities grow. These fees help ensure that as new neighborhoods develop, the infrastructure grows with them. Roads, drainage, water systems, and other essentials are supported through these funds. For homeowners, that means reliable services and a community designed for long-term value.

What Are Impact Fees?

In Texas, an impact fee is a one-time charge that cities or utility districts impose on new development to help cover the cost of expanding public infrastructure such as roads, water, sewer, and drainage systems.

Under Texas Local Government Code Chapter 395, these fees can only be used for specific capital improvements. That includes building or expanding water treatment facilities, wastewater systems, storm drainage, and roadways – projects designed to support a community’s long-term growth and value.

It’s important to know that impact fees are not used for everyday repairs or maintenance. Instead, they’re set aside to build the new systems and improvements that keep up with growth. For homeowners, this means reliable services and communities that are designed to handle future needs.

Why Impact Fees Matter to Homeowners

Impact fees help communities grow without placing extra tax burdens on long-time residents. Instead, the costs are shared by the new developments and future homeowners who benefit from the expanded infrastructure.

For new homebuyers, these fees are usually included in the overall purchase price or closing costs. That means you are not just buying a home, you are investing in the neighborhood’s infrastructure too. And that infrastructure is what makes the community livable, functional, and valuable over time.

How It Works in Practice

In Texas, cities that charge impact fees must follow the same basic rules set by state law. They prepare a growth plan, called Land Use Assumptions (a forecast of how the city expects to grow), and a Capital Improvements Plan (a list of the major infrastructure projects needed to handle that growth, like water lines, sewers, or roads).

From there, the city calculates the maximum fees allowed and sets the actual amounts, often based on things like the size of a new home’s water meter or the extra traffic a neighborhood is expected to generate. In many Texas cities, this is how fees are structured and collected when building permits are issued or plats are approved.

Benefits for Homeowners and Communities

• Reliable infrastructure – Impact fees fund necessary water, sewer, and road improvements before new homes are occupied.
• Community value – Strong infrastructure supports property values, enhances neighborhood appeal, and improves daily comfort for everyone.
• Long-term savings – Well-built systems mean fewer costly repairs and less disruption over time, giving homeowners peace of mind.

Your Home and Hogan Homes’ Commitment

Hogan Homes has been building in South Texas for nearly 60 years, with a focus on people, quality, and homes that stand the test of time. Our floor plans are designed for everyday living, with thoughtful touches like drop zones, roomy pantries, well-placed laundry areas, and energy-efficient features. Each design is meant to make life simpler, more organized, and more enjoyable for families.

Impact fees align with this vision by supporting strong, reliable infrastructure in growing neighborhoods. When you invest in a Hogan home, that one-time fee helps ensure your community has the roads, water systems, and other essentials needed to support your family’s lifestyle now and well into the future. It’s an investment not just in your home, but in the lasting value and comfort of your neighborhood.

A Snapshot of How Impact Fees Work in Texas

• Cities prepare a Land Use Plan and a Capital Improvement Plan to identify future growth and infrastructure needs.
• Maximum fee amounts are set based on projected development and demand.
• Fees are collected at the time building permits are issued.
• Funds go into dedicated accounts and may only be used for approved projects.
• Infrastructure improvements are built to serve the new neighborhood.

State law requires impact fees to be kept in interest-bearing accounts, used only as planned, and refunded if not spent within the required timeframe.

Why This Matters to You

When you pay an impact fee, you are not just covering a cost – you are helping build a community with reliable roads, water systems, and the kind of infrastructure that makes daily life easier. Hogan Homes takes the same approach to every house we build, combining thoughtful design with strong community planning to give families confidence in their investment.

Ready to see how it all comes together? Explore Hogan Homes floor plans designed to fit your lifestyle and budget here.

Planning With Confidence

Impact fees make communities stronger and more sustainable. They help fund the reliable infrastructure that supports daily life, from smooth roads and clear drainage to stable water and sewer systems. With Hogan Homes, you are not just buying a house; you are investing in thoughtful design and the solid infrastructure that supports it.

Sources

“What are Impact Fees?” McKinney Texas,
https://www.mckinneytexas.org/FAQ.aspx?QID=525
“Legal Q&A by Tad Cleaves,” Texas Municipal League,
https://www.tml.org/DocumentCenter/View/3121/Impact-Fees–2022-03-PDF
“Impact Fees; What’s The Impact of That?” Lloyd Gosselink,
https://www.lglawfirm.com/impact-fees-whats-the-impact-of-that/
“Impact Fees,” City of College Station,
https://www.cstx.gov/business-development/engineering/impact-fees/
“Planning and Development Provisions,” Texas Statutes,
https://statutes.capitol.texas.gov/docs/lg/htm/lg.395.htm
“Impact Fees,” Pilot Point Texas, https://www.pilotpointtx.gov/555/Impact-Fees