New Castle County is significantly raising the impact fees it charges developers for the first time since 1999, aiming to help offset the rising costs of public services. A recently passed bill by the New Castle County Council will link the fees to the annual Engineering News Record Construction Cost Index starting in 2028.

"As numerous developments have come online over that quarter century, much of the cost of new infrastructure improvements to serve these new residents and commercial has been unfairly borne by existing property owners," said County Council member Dee Durham, a primary sponsor of the bill alongside David Carter and Brandon Toole.

What the Impact Fees Can Be Used For

‍“New Castle County impact fees cannot be used to cover operating costs but are used toward the cost of increased demand for parks, libraries, emergency management services, fire and rescue, law enforcement, and county facilities,” Durham explained.

In the interim, fire and rescue fees have been adjusted, according to the bill.

Exemptions and Affordable Housing Provisions

‍The new law exempts certain new affordable housing projects. These include units built by nonprofits, homes using the IRS low-income housing tax credit, and those participating in the Delaware State Housing Authority/Cinnaire's Catalyst Fund.

Long-Standing Debate Over Impact Fee Increases

‍The proposal has been a point of contention for years. A 2022 report from a consultancy recommended raising the $1,157 fee for a single-family home to $2,036, just to account for inflation since the last adjustment in 2006.

One of the primary concerns surrounding the increase is using the fees to fund the county’s ambitious goal of preserving at least 30% of its land as protected open space by 2030. To address this, the bill includes the introduction of an open-space impact fee, which is set to take effect by February 1, 2026.

When the bill was introduced in January, it had three primary sponsors—John Cartier, George Smiley, and Kevin Caneco—along with three co-sponsors. However, in the final vote, only John Cartier supported the bill, ensuring its passage. Penrose Hollins and Jea Street voted against it, while Janet Kilpatrick, Timothy Sheldon, and Monique Williams-Johns abstained.

The Home Builders Association of Delaware did not provide any comment on the newly passed law.