What approach is designed to compensate for infrastructure costs due to new developments?

The approach that is designed to compensate for infrastructure costs due to new developments is impact fees. Impact fees are charges imposed by local governments on developers to cover the costs of public infrastructure that will be required as a result of new construction or development. This is particularly relevant when new residential, commercial, or industrial projects are developed, as those projects can increase demand for public services such as roads, schools, and utilities.

By collecting impact fees, municipalities can help ensure that the financial burden of new infrastructure is not entirely placed on existing residents or taxpayers, but rather shared by those who are creating the demand for these services. This method specifically links the growth caused by a new development to the costs related to infrastructure expansion or improvements, thus promoting not just fiscal responsibility, but also sustainable urban planning.

While revenue bonds, joint ventures/privatization, and unlimited tax general obligation bonds have roles in financing public projects and infrastructure, they do not specifically focus on fees related to new developments. Revenue bonds are typically backed by the revenue generated from the project they fund, while joint ventures and privatization involve partnerships between the public and private sectors to deliver services. Unlimited tax general obligation bonds are a way for governments to raise funds through the authority to levy taxes but do not directly