How Proposed Impact Fee Changes Could Affect the Cost of Building a Home in Fort Collins

Building a new home in Fort Collins is already an expensive endeavor, and one piece of that cost comes from impact fees—one-time charges assessed on new development to help fund infrastructure and public services. In Fort Collins, these are called Capital Expansion Fees (CEFs) and Transportation Capital Expansion Fees (TCEFs).

These fees are designed to ensure that growth pays its fair share for the added demand on city facilities—parks, police, fire protection, general government buildings, and transportation networks. The City of Fort Collins has been reviewing how these fees are calculated, and new changes are being proposed for adoption in 2026. For homeowners, builders, and developers, these changes could shift the cost of building different types and sizes of housing.

The Current Fee Structure

Today, Fort Collins calculates impact fees largely based on square footage. Residential units are grouped into five size categories, with fees ranging from $10,108 for units under 700 square feet up to $20,740 for homes larger than 2,200 square feet. These fees apply to both single-family and multifamily homes.

For example:

• A Single-family Detached home currently pays around 3.3% of its total development cost in impact fees.
• A Multifamily unit currently pays closer to 6% of its development cost.

What’s Changing

The City commissioned new studies in 2023 to better align fees with actual household sizes, travel patterns, and service demand. Instead of a one-size-fits-all structure, the revised methodology breaks fees down more specifically.

Here are the key proposed changes:

1. More Size Categories
   • Residential units would expand from five size tiers to seven tiers for single-family homes.
   • The maximum size tier would increase from 2,200 sq. ft. to 3,600 sq. ft., with larger homes paying more.
2. Separate Housing Types
   • Instead of lumping all residential into one category, there would now be three:
     • Single-family detached
     • Single-family attached (townhomes, duplexes)
     • Multifamily and accessory dwelling units (ADUs).
   This distinction matters because detached homes typically house more people and generate more vehicle trips than attached or multifamily units.
3. Refined Transportation Fees
   • The TCEF study found that multifamily units produce fewer vehicle miles traveled (VMT) per household compared to detached homes.
   • As a result, TCEF fees would rise for single-family detached homes but drop significantly for multifamily units.
4. Splitting General Government Fees
   • The “General Government” category would be split into facilities and fleet, giving more transparency on how funds are used.

Proposed Fee Levels

Under the revised structure, residential impact fees (not including utilities) would range from $6,780 for the smallest multifamily unit to $16,801 for the largest single-family attached home.

Here’s how that compares to today:

• Single-family detached homes: Overall fees would increase about 22%.
• Single-family attached homes: Fees would rise about 3%.
• Multifamily homes: Fees would decrease 16%.

Revenue Impact

If applied to 2024 building activity, the new fee structure would generate a modest overall increase of about 3% in total impact fee revenue compared to 2025. But the shift would be uneven across housing types.

This reflects the city’s effort to better match fees with actual impact. For example, because multifamily housing generates fewer car trips per unit, its transportation fees would be cut significantly.

What It Means for Builders and Buyers

1. Building Larger Homes Gets More Expensive
   Homes over 2,200 sq. ft. will face higher fees than before, with new tiers extending up to 3,600 sq. ft. This could encourage builders to rethink square footage or pivot to smaller models to keep costs down.
2. Townhomes and Duplexes See Moderate Shifts
   Fees for single-family attached homes are going up, but not as sharply as for detached homes. These units could become a more cost-efficient option for buyers priced out of detached housing.
3. Multifamily Becomes More Affordable to Build
   With fees dropping as much as 16%, multifamily projects stand to benefit the most. This aligns with Fort Collins’ broader housing affordability goals, as reducing costs for developers could spur more apartment and condo construction.
4. Small Portion of Total Development Costs
   Even with these adjustments, impact fees remain a relatively small portion of overall building costs—rising from 3.3% to 3.7% for a typical detached home and falling from 6.0% to 4.9% for a multifamily unit.

Next Steps

The City Council is scheduled to consider adoption of the revised fees in October 2025, with changes taking effect January 1, 2026. Outreach is ongoing with builders, housing boards, and economic advisory groups.

Here’s the bigger question: will lowering impact fees on multifamily projects actually decrease the price of those homes, or will pricing continue to be driven more by market demand than by fees?

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