If you build in Utah, the city where you pull the permit can swing the impact fee bill on the same house by tens of thousands of dollars. That's one of the main takeaways from a new performance audit of how Utah cities, counties and special districts charge and spend impact fees, presented Oct. 20 to the Legislative Audit Subcommittee (via the Utah Office of the Legislative Auditor General).
The verdict in Report 2026-33 is mixed. Auditors said Utah's Impact Fees Act is more detailed than most western states' laws and the system generally works. But their close review of nine local entities (five cities, two counties and two special districts) found that 56% either spent fee money incorrectly or missed other requirements in state law. They didn't pin it on one cause, and they found no systemic sign that fees in the sample weren't based on actual costs.
Old studies are a recurring problem. Before a Utah entity can charge an impact fee, it needs an impact fee facilities plan (IFFP) and an impact fee analysis (IFA) that tie the fee to the growth-related infrastructure it pays for. Auditors pulled 41 of those studies and found they ranged from under a year to 27 years old, with close to half older than five years. One county charging fees had no required studies at all. Arizona, Idaho and New Mexico require a fresh look every five years, and Nevada every three.
Stale studies cut both ways, the report says. They can leave new development paying for projects that never get built, or undercharge until a big catch-up increase hits. One service district collected fees for a decade for a pipeline it never built, a dispute that ended in a roughly $10 million settlement, and one city agreed to refund about $1 million after developers challenged the studies behind its fees.
Transparency is the other weak spot. State law says the studies have to be available in a public library, and only two of the nine entities met that requirement. Auditors suggest lawmakers consider requiring the IFFP and IFA to be posted online. The State Auditor has also tightened annual reporting: its Auditor Alert 2023-02, issued in January 2024, requires fee collections to be tracked by development project and by the projects the money is budgeted for or spent on.
Then there's the money. Across 16 sampled cities, total impact fees on a 2,000-square-foot home ran from about $11,000 to $36,000. The audit's side-by-side chart uses Kaysville as the low end of that sample and Grantsville as the high end. Grantsville's council adopted amendments to its fee studies on May 6, 2026, according to a city resolution posted on the state's Public Notice Website; the audit doesn't say which version of the city's fees it used.
The finding likely to get the most attention at the Capitol is about home prices. Working with the Kem C. Gardner Policy Institute, auditors looked at sales of nearly 10,000 units in 16 cities and found no statistically significant link between impact fees and final new-home sale prices. Each $1 of fee lined up with about 39 cents of sale price, which the study called too small to matter. Auditors read that as builders absorbing the cost before the home is sold, with land, infrastructure limits, population growth and interest rates doing more to drive prices.
The report makes ten recommendations, several of them for lawmakers to weigh: a regular update cycle for fee studies, online posting, and clearer oversight powers for the State Auditor. The Office of the Property Rights Ombudsman is asked to build impact fee training and speed up its advisory opinions; its impact fee queue grew from one request in 2019 to seven in 2025. Any change to the statute would be up to the Legislature.
Why it matters for Contractors
The audit's own read is that impact fees come out of the builder's side of the deal, not the buyer's. If you're a small shop building a few homes a year, that's your margin.
Before you buy a lot or price a spec home, ask the city or district for its current IFFP and IFA and check the date. A study more than five years old is worth a closer look, and this audit gives you solid footing to ask questions. The city's annual impact fee report, filed with the State Auditor, shows where the money is going.
If a fee looks out of line with the study behind it, the Property Rights Ombudsman handles impact fee advisory opinions, though the audit says waits have been getting longer. And budget city by city: on the same 2,000-square-foot house, the sample's spread is about $25,000.