Municipalities rely on development charges for revenue, but most do not design these charges to support growth management objectives. The current basis of assessment for development charges has played a role in incenting low-density, automobile-centred development. This type of development in turn necessitates investment in new, and more costly, infrastructure by municipalities. There are many factors that influence where development happens, including zoning by-laws, planning policies, and market factors that influence supply and demand. But development charges are a significant cost that can influence development location, timing and other decisions. As a result, more municipalities should consider better aligning the design of their development charges with growth management policies. This Brief will examine how development charges can be designed to provide the right incentive for more compact urban development, by changing the incentives for developers and consumers.