By HRCNN Staff Writer
Hampton Roads Construction News Network
When local governments weigh new development, one unavoidable question lingers: who pays for the infrastructure that growth demands? Roads, schools, utilities, and stormwater systems all must expand to meet the needs of new subdivisions and multifamily communities. Across much of the country, states impose “impact fees” to ensure that new housing and commercial projects contribute their share of those costs.
In Virginia, however, the practice remains rare. Unlike states such as Florida, Texas, or California, where impact fees are a standard tool, Virginia leans heavily on negotiated developer contributions—known as proffers—or on general tax revenues. The result is that the costs of growth often fall on the broader public, rather than being tied directly to the developments that generate new demand. In 2025, House Bill 2683 sought to make impact fee authority more accessible by lowering the population threshold for localities and removing a growth-rate requirement. The bill, however, stalled in committee, leaving the status quo intact.
There is one notable exception. In late 2024, Stafford County revived its transportation impact fee, becoming the only Virginia locality currently using the tool. Beginning in July 2025, Stafford will levy fees on residential, retail, and commercial projects, with revenue projections between $15 million and $20 million annually to fund transportation improvements. This example underscores how limited the practice remains across the Commonwealth.
The debate resonates strongly in Hampton Roads, where population growth continues to strain classrooms, roads, and stormwater systems. At zoning hearings in Chesapeake and Virginia Beach, residents frequently voice concerns about crowded schools and congested roadways. Local officials acknowledge the urgency but, absent a broader impact fee framework, they are left to rely on case-by-case proffers or general funds. For many residents, this feels like subsidizing development with their tax dollars.
Developers counter that Virginia’s existing proffer system already places heavy financial obligations on them. They warn that layering impact fees on top could increase housing costs in a region already grappling with affordability challenges. Supporters, on the other hand, argue that without new revenue mechanisms, infrastructure will continue to lag behind growth—leaving long-term strains on communities and taxpayers alike.
For now, Virginia’s growth is paid for through negotiated contributions and public resources. But as Hampton Roads continues to expand—and as demands on transportation networks, schools, and stormwater systems grow—the question of who pays is unlikely to fade. Whether the Commonwealth eventually embraces broader impact fee authority or clings to its traditional approach, Hampton Roads will remain at the center of the debate.
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Hampton Roads Construction News Network (HRCNN) is the region’s dedicated platform for reporting on development, infrastructure, and policy. By delivering accurate, timely coverage, HRCNN works to keep residents, builders, and decision-makers informed about the forces shaping the future of Hampton Roads.