Community Guide to Development Impact Analysis by Mary Edwards

Introduction Fiscal Traffic Socio-Economic Environmental Putting it Together Cost of Community Services


In recent years, considerable attention has been given to the potential impacts of growth and development on communities throughout Wisconsin. In general, growth has been viewed as healthy and desirable for communities because it often leads to additional jobs; increased income for residents; a broader tax base; and the enhancement of cultural amenities such as libraries and parks. However, communities are increasingly aware that growth may also be accompanied by costs such as increased fiscal expenditures for necessary public services and infrastructure, traffic congestion, consumption of local natural resources, loss of open space and unique cultural attributes. In addition, development decisions are too often made without a sufficient understanding of the consequences of those decisions on overall community well-being. Since changes induced by growth in a community are not always positive, carefully planned development is necessary for ensuring that growth is consistent with the long-range goals of the community. 

Development impact assessment provides a framework for addressing this issue. It is designed to assist local planners and decision-makers in understanding, ahead of time, what types of impacts a particular development may have on a community, thus allowing time for avoidance or mitigation of any adverse effects of a proposed development. 

This chapter provides an overview of development impact assessment, including the benefits of conducting such an assessment. It also provides general guidelines for conducting a development impact assessment, including the types of impacts that should be assessed during the process, when the assessment should be pre-pared, who should do it and steps to follow in conducting the assessment. 

Development impact assessment is premised on the assumption that a community has an up-to-date, comprehensive land use plan. Without this, no context exists to use development impact assessment information in decision-making because the relevant community values and aspirations have not been identified. 

What is a Development Impact Assessment? 

Development impact assessment involves a process to comprehensively evaluate the consequences of development on a community. The assessment process should be an integral part of the planning process as it provides extensive documentation of the anticipated economic, fiscal, environmental, social and transportation-related impacts of a particular development on a community. 

The development impact assessment process makes use of existing information, where possible to determine potential impacts of a proposed development. It also employs techniques to gather additional, new information, where necessary. Development impact assessment provides a framework to integrate these data, models, spatial and statistical analyses and experiences in other locales to predict development impacts. For each, impact area (i.e. fiscal, environmental, socio-economic, and transportation), this guide provides a series of worksheets, questions and other methods that may be used to collect information that will assist local officials and planners in assessing impacts. 

What are the Benefits of Conducting a Development Impact Assessment? 

The development impact assessment process is designed to enhance sound land use management at the local level. Effective land use planning includes a number of important characteristics. The Department of Natural Resources considers a particular land use to be sound if it minimizes adverse environmental impacts, is suitable for the location, makes efficient use of existing community infrastructure and services, accounts for community costs, is the product of broad public consensus and is consistent with community regional character. This guide and the development impact assessment process, in general, are designed to ensure that sound land use practices are integrated into day-to-day operations of local government and are included in long-range plans for communities. 

Development, especially that which is large, unique or precedent-setting may have a substantial impact on a community’s financial, environmental and cultural resources. Development impact assessment provides an opportunity for communities to gain advance understanding of the potential impacts of a particular development, so that they may plan to both efficiently meet new service demands (e.g., additional road construction or water line installation) and avoid potential environmental or social costs that may accompany the development. Development impact assessment is also important because it: 

What Types of Impacts Matter and Why? 


Fiscal analysis involves assessing the public service costs and revenues associated with the development. Such an analysis projects the net cost of the development on the fiscal balance sheet of the community. Since fiscal feasibility plays an important role in determining whether or not to proceed with a proposed development, fiscal impact analysis is a critical component of any development impact assessment. 


Development often leads to environmental impacts including, but not limited to, loss of open space, impacts on groundwater and surface water quantity and quality (e.g., drinking water supplies), changes in air quality, increases in impervious cover (e.g., paved roads, parking lots), alteration of wildlife habitat and changes in landscape aesthetics. To the extent that a proposed development affects natural resources in a community, an environmental impact assessment is designed to identify the level of impact and assist the community in ensuring that development plans avoid and/or mitigate associated environmental impacts. 


Socio-economic impact assessment focuses on evaluating the impacts development has on community social and economic well-being. This analysis relies on both quantitative and qualitative measures of impacts. Development impacts are generally evaluated in terms of changes in community demographics, housing, employment and income, market effects, public services, and aesthetic qualities of the community. Qualitative assessment of community perceptions about development is an equally important measure of development impacts. Assessing proposed developments in a socio-economic context will help community leaders and residents identify potential social equity issues, evaluate the adequacy of social services and determine whether the project may adversely affect overall social well-being. 


Traffic is a natural result of many development projects. Thus, in considering a development proposal, it is important to evaluate potential transportation-related impacts including additional infrastructure requirements (e.g., more roads, traffic lights), and increased traffic congestion. A transportation impact assessment will assist the community in ensuring that traffic in the community continues to flow adequately. When prepared in conjunction with the other impact assessment components included in this guide, the transportation impact assessment will help determine the feasibility of additional transportation projects needed to accommodate growth and whether there are environmental and social issues that need to be addressed if additional infrastructure is required and/or traffic increases. 

What are Some Overall Guidelines for Analyzing Specific Development Impacts? 

It should be noted that development impact assessment is designed to assess the impacts of development taking place at one point in time and space. Although many of the concerns are similar, it would have to be adapted to understand the impacts of many increments of development over time or across an extensive area. 

When Should a Development Impact Assessment be Conducted? 

As soon as a development is considered and well before substantial capital has been committed, an analysis of potential impacts should begin. Once a draft plan of the proposed development has been submitted to the community, it is appropriate to begin thinking about the potential impacts of the development on the community, especially whether or not the project is consistent with the community’s plan or vision for the future. It is also important to keep in mind that the development impact assessment must be responsive to changes in the proposed development (e.g., size, scope, type of development). 

Who is this Guide Written for? 

This guide is intended for use by community leaders, planners, extension agents and community residents. Ideally, the development impact assessment should be pre-pared by a planner or staff person in the community who has knowledge of and is responsible for the issues addressed in the assessment. It may often be appropriate for the individual(s) in charge of the assessment to seek the assistance of a community task force or planning commission. Development impact assessment presents the community with an opportunity to provide valuable input into the local planning and decision-making process. 

What are the Steps to Development Impact Analysis? 

Once a development proposal is received and before the impact analysis is con-ducted, a number of preliminary questions and concerns should be addressed. Prior to engaging in the impact analysis, consider the following steps: 

  1. Review the proposal for consistency with your community’s zoning code, land use plan and/or comprehensive plan. 
  2. If the proposal is not consistent, clarify community needs and values about the site and its future use. 
  3. Consider the following factors: the magnitude of the development proposal (in terms of potential workers or residents and size), your time and your resource constraints. Then, decide how detailed an impact analysis is possible. For example, a smaller development that is not expected to attract a large number of residents or workers may not need a social impact assessment or a traffic impact assessment. 

    Once you have decided to conduct a development impact assessment, continue the process as follows: 
  4. Develop an information gathering strategy. The first component is to decide what data will be needed and what is currently available. Then, information collection and integration mechanisms must be developed. Information collection may require gathering data from other agencies, setting up task forces or public meetings, and getting detailed information from developers. Data integration typically involves converting data to common formats in data bases, spreadsheets and geographic information systems, though simply gathering information in existing (e.g., paper) formats may be sufficient for some development impact assessments. It may be necessary to gather additional data as the process progresses. 
  5. Examine each of the impact categories you have decided to address to gauge the overall effects of the proposed development on the community. This requires gathering information on the development; collecting data on the fiscal and social and economic resources in your community; and eliciting the expertise and opinions of staff and community residents. The impact assessment should be integrated into the larger planning framework for the community and assist the community in adhering to its priorities. This guide is intended to assist you with Steps four and five described above. 

How is the Guide Structured? 

The guide allows the user to evaluate a proposed development from a number of important and different dimensions — fiscal, environmental, socio-economic and transportation-related impacts. It is intended to be used to evaluate proposed developments ranging from subdivisions to strip malls. 

The chapters of this guide work through each of the impact areas individually, yet emphasize the importance of using the guide as a whole, so that a comprehensive impact analysis may be achieved. Each chapter includes a series of workbook-style pages that are designed to ease the process of preparing the impact assessment. The list of references provided at the end of each chapter offer direction to the user on where to go for additional information on the methods and types of information that may be useful in preparing a comprehensive development impact assessment. 


Wisconsin Department of Natural Resources. Common Ground: Report of the DNR Land Use Task Force. Madison, WI.