Iowa City, IA Accessory Structures: ADU Impact Fees (2026)

Iowa, unlike states such as Florida, Texas, and California, has not enacted a comprehensive impact fee enabling statute. Iowa Constitution Article III §31 and the Dillon's Rule tradition (Iowa is a partial Dillon's Rule state) constrain unauthorized exactions on development. Cities derive their general powers from Iowa Code Chapter 364 (city home rule) and planning powers from Iowa Code Chapter 414 but have no specific impact fee authorization equivalent to California's Mitigation Fee Act (Gov. Code §66000) or Florida's Impact Fee Act (Fla. Stat. §163.31801). The Iowa Supreme Court in Home Builders Ass'n of Greater Des Moines v. City of West Des Moines, 644 N.W.2d 339 (Iowa 2002), struck down a residential development impact fee for lack of statutory authority — a controlling precedent that constrains Iowa City and every other Iowa city. Iowa City therefore relies on permit fees and utility connection (tap) fees rather than impact fees to recover infrastructure costs. Water and sewer tap fees are administered by Iowa City Water and Wastewater for residential service expansion; an accessory apartment with separate service typically pays a tap fee plus any meter installation cost. If the unit shares an existing meter and service line with the principal dwelling, tap fees may not apply. School districts under the Iowa Education Code (Iowa Code Title VII) lack impact-fee authority and are funded through the state aid formula under Iowa Code Chapter 257. Recreation fees-in-lieu and park dedication requirements may apply to subdivisions under Iowa Code §354 (platting) but not generally to single-lot infill accessory apartments. Net result for an Iowa City applicant: zoning fee, building permit fee, and water/sewer tap fees if separate service is established.