What Are Impact Fees — and Why Do They Exist?
Impact fees are one-time charges collected by local governments at the time of a building permit to fund the infrastructure needed to support new development. When you add a dwelling unit to a property — even a small backyard ADU — you are effectively adding new demand to roads, schools, parks, sewer systems, and water supply. Impact fees are how the city recovers that infrastructure cost from the builder rather than spreading it across all taxpayers.
They are not optional, they are not negotiable, and they are assessed per unit — not per square foot. A 400 sq. ft. ADU pays the same impact fee schedule as an 800 sq. ft. ADU in most categories.
What You'll Pay: The Standard Fee Schedule (2026)
| Fee Category | Standard Amount | With Workforce Waiver |
|---|---|---|
| Transportation Impact Fee | $600–$1,100 | $0 — 100% Waived |
| Sewer/Water Impact Fee | $500–$900 | $0 — 100% Waived |
| School Board Fee (if >750 sq. ft.) | $200–$650 | $0 — 100% Waived |
| Parks & Recreation Fee | $150–$400 | $0 — 100% Waived |
| Building Permit Fee | $450–$1,050 | $0 — 100% Waived |
| Total Range | $1,900–$4,100 | $0 + $10,000 Rebate |
Who Qualifies for the Rebate: The "Hometown Hero" Standard
The Orlando ADU Incentive Program requires the homeowner to commit to renting the completed unit to a qualifying tenant. The city defines qualifying tenants as "Hometown Heroes" — local workforce members earning at or below 120% of the Area Median Income (AMI) for Orange County.
Who counts as a qualifying tenant?
- K-12 teachers, school administrators, and support staff employed by Orange County Public Schools
- Registered nurses, LPNs, and medical technicians employed at area hospitals or clinics
- Law enforcement officers, firefighters, and EMTs employed by a Florida municipality
- City and county government employees below management tier
- Any worker in the 80–120% AMI band — even if not in the above categories — who can provide employer documentation
The rental commitment period is 3 years minimum. Rent must be set at or below the "Affordable" rate published annually by Orange County's Housing and Community Development Division.
The 2026 Area Median Income (AMI) Thresholds for Orange County
| Household Size | 80% AMI (Max Rent Eligible) | 120% AMI (Program Cap) |
|---|---|---|
| 1 Person | $58,100/yr | $87,150/yr |
| 2 Persons | $66,400/yr | $99,600/yr |
| 3 Persons | $74,700/yr | $112,050/yr |
| 4 Persons | $83,000/yr | $124,500/yr |
Step-by-Step: How to Claim the $10,000 Rebate
- Before Permit Submission: Register your project with Orlando's Housing and Community Development Division and obtain a "Workforce ADU Project Number." This number must appear on your building permit application.
- At Permit Issuance: The waived fees are applied automatically at permit pickup — you will see $0 on the fee invoice for the waived categories. Keep this invoice as documentation.
- At Framing Inspection: Sign the "Workforce Housing Covenant" — a recorded document attached to the property deed committing the unit to workforce rental for 3 years. Failure to sign before drywall goes up disqualifies the $10,000 rebate.
- At Certificate of Occupancy (CO): Submit the signed Workforce Housing Covenant confirmation to the Building Division. The $10,000 rebate check is issued within 30–45 days of CO.
- After Occupancy: Submit an annual tenant income certification for 3 years confirming the tenant still qualifies. Missing one annual certification does not automatically void the covenant but can trigger a repayment demand.
"The rebate affidavit window is the step that kills most homeowners' applications — not because they don't qualify, but because their general contractor didn't know to schedule it before the framing inspection. We've seen homeowners lose the $10,000 because they tried to file the covenant paperwork at CO and were told it was too late. We build the rebate paperwork sequence directly into our project schedule from day one. When we manage your permit, you don't miss a deadline — because we've done this enough times to know where the city's process breaks down."
What If I Don't Want to Rent to a Workforce Tenant?
The rebate and fee waivers are tied exclusively to the workforce housing commitment. If you plan to rent at market rate or use the ADU as a short-term rental (Airbnb), you will pay standard impact fees and receive no rebate.
That said, the math still works for market-rate rentals: a $90,000 garage conversion generating $1,600/month in net rent achieves full payback in under 5 years — with or without the rebate. The incentive simply accelerates that timeline significantly.