Arizona sticks closely to state rules when it comes to impact fees. Some cities made changes recently, while others took more dramatic moves. This update looks at what’s new—and what’s changing in a few places, highlighting how different communities approach growth and infrastructure planning.
Changes in Phoenix
In April 2025, the Phoenix City Council approved revisions to both development impact fees and water resources acquisition fees. Those changes took effect in late June 2025, aiming to better align revenue collection with projected infrastructure demands in fast-growing parts of the city.
What’s happening in Tucson
Tucson must update its Land Use Assumptions and Infrastructure Improvements Plan at least every five years under state law. The last update happened in June 2020. In March 2025, the city adopted new reports to guide the next phase. The next steps include preparing a draft fees report, scheduling public hearings, and finalizing updates so that funding matches long-term development needs.
Moves in other cities
Several smaller municipalities also updated their fee rules. Buckeye rolled out revised impact fees that took effect in May 2025. Queen Creek approved a new schedule of fees the same month, based on updated growth projections and service area requirements. In contrast, Sierra Vista eliminated development and impact fees entirely as of July 2025, signaling a different strategy for encouraging growth.
Statewide context
Arizona law sets strict limits on development impact fees. Cities must connect fees to infrastructure needs directly tied to new development. They cannot use the funds for maintenance or improvements to existing facilities, and must spend collected funds within the same service area. The Arizona Supreme Court has also ruled that cities cannot push the costs of upgrading current systems onto future developers, ensuring a fairer distribution of responsibility.
Arizona cities continue to adjust impact-fee rules as growth accelerates, balancing local infrastructure needs with state-level requirements. These changes will likely shape how new projects are planned and how communities manage the rising cost of expanding public services across rapidly developing regions.