New state fee planned to fuel road improvements
September 25, 2026
Kevin T. Conlon, Cape Gazette
County questions whether it will be enough to support needed work.
This is the fourth part of a continuing series about the implications of state legislation intended to address a dire statewide housing shortage and how it will affect Sussex County.
A new state law creates a fee to fund road improvements to keep pace with booming housing development.
“Infrastructure is expensive,” said C.R. McLeod, director of community relations for the Delaware Department of Transportation. “How do we pay for new infrastructure?”
House Bill 450, the Reforming Opportunities and Accelerated Development for Delaware Act, or ROAD-DE Act, was signed in July by Gov. Matt Meyer. It accelerates and streamlines approval processes for projects that create housing, jobs and other critical infrastructure.
The fee will put the burden of improving roads on the people buying homes that contribute to road congestion, rather than on DelDOT and state taxpayers, according to HB 450.
The deadline for the state to establish the transportation impact fees is Jan. 1, said Jeffrey VanHorn, DelDOT’’s director of economic development coordination.
Collection of the fees will begin immediately afterward, paid before building permits are issued for new homes, Van Horn said.
One of the goals of the fee is to help direct where growth occurs, steering it away from rural locations and toward growth areas, where it exists and is supported by infrastructure.
Higher state transportation impact fees may be set outside growth areas and Transportation Improvement Districts – where a road improvement plan is established and developers contribute toward anticipated road work – to discourage development there.
In Sussex County, there is a TID in the Lewes area and others are being drafted for Roxana and Milton.
Sussex County Council struggled early this year to create ordinances decreasing rural housing density to similarly shift development away from rural farmland and forests and toward growth areas.
The county’s efforts stalled after farmers complained about potential harm to their businesses and uncertainty over implications of HB 450 and Senate Bill 23, which aims to increase production of affordable housing and other types of homes.
Transportation impact fee revenue will fund DelDOT’s planning, designing, engineering and construction of improvements to infrastructure, including deficient pedestrian facilities and substandard signals and intersections, acquire rights-of-way and easements, and cover costs to administer the new rules.
The fees will expedite projects in the state’s Capital Transportation Program – a six-year plan for spending on long-term physical assets, such as roads, equipment and land – which is updated every two years.
“We will be able to push forward projects,” VanHorn said.
A statewide analysis of roads and the needs for improvements has already begun, he said.
Sussex County officials have said they were glad to hear the impact fees must be spent in the county in which they are collected. Much of the housing growth and the need for road improvements in recent years has been in the county.
DelDOT must consult with local governments on how to spend the money collected from the transportation impact fee.
There will be a public process as the fee structure is created, VanHorn said.
The fee will be assessed for all developments, he said. In the past, only larger projects bore the cost of road improvements, especially those proposed as a road exceeded capacity from earlier home construction, VanHorn said.
In addition to the fee, a developer will still be responsible for access and entrance improvements directly to its site, including auxiliary lanes, as required by DelDOT. The agency may also require changes to entrance locations or frontage with identified safety issues, and any work required will be at the cost of the developer.
A traffic impact fee calculator will be developed as part of the process, allowing developers to predict their contribution to infrastructure improvements.
DelDOT will use an additional transportation surcharge, equal to 2% of the impact fee, to fund nonprofit environmental protection organizations, revitalize former industrial sites and create pedestrian and bicycle routes.
Revenue will be divided among:
The Delaware Farmland Preservation Fund
The Delaware Land and Water Conservation Trust Fund
The state Department of Natural Resources and Environmental Control’s Shoreline and Waterway Management Section
DNREC’s Brownfields Development Program
DelDOT's programs for sidewalks to bicycle pathways
The state Brownfields Development Program.
County Administrator Todd Lawson said he appreciated the work DelDOT has done to improve roads in the county in recent years. But he questioned whether the traffic impact fee will be adequate to fund road work to keep pace as the state encourages more housing construction in the coming years.
Planning and obtaining rights-of-way often takes years, he said.
“Just collecting money will not get roads built faster,” Lawson said.
