Impact fees are one-time charges the City of Madison assesses on new development to fund infrastructure improvements. When you build an ADU, you’re adding a dwelling unit — which triggers some of the same fee categories that apply to any new residential construction. Knowing what to expect before you budget prevents a surprise invoice during permit review.
Park Impact Fees
The Park Impact Fee is the most common fee assessed on ADU projects in Madison. The city calculates it based on the addition of a new dwelling unit and the estimated demand that unit places on park infrastructure. Fee amounts vary by location — properties in areas with less existing park access pay more. As of recent years, the park impact fee for a typical Madison ADU has ranged from approximately $2,000 to $5,000 depending on the district. The exact amount is determined during site plan review by Madison’s Parks Division.
Transportation Impact Fees
Transportation impact fees may apply depending on location and ADU type. These fees fund transportation network improvements proportional to the traffic generation expected from the new unit. ADUs typically generate less traffic than a primary residence, and fees are scaled accordingly. In some transit-oriented areas, transportation impact fee reductions apply — confirm with the city if your property is near a high-frequency transit corridor.
Water and Sewer Connection Fees
These function similarly to impact fees. If your ADU requires a new water tap for separate metering, the Madison Water Utility charges a connection fee that can run $3,000–$8,000 or more. MMSD sewer connection fees follow a similar structure. If your ADU shares the existing connection — the default for most projects — these fees don’t apply.
When Do You Pay?
Impact fees are assessed at building permit issuance — Phase 2 of the permit process in Madison. You’ll know the amounts after site plan approval (Phase 1) but payment is required to receive the building permit. Budget for them as part of your total project cost. We track impact fee schedules for Madison and surrounding municipalities as part of our standard permitting process. For a current estimate on a specific parcel, start with a feasibility check.