The Supreme Court recently made a landmark decision that will affect local governments’ ability to impose fees on property developments, particularly when those fees are not directly linked to the actual impact of the development. The case involved George Sheetz, a retired construction worker who was charged a $23,000 “traffic impact mitigation” fee by El Dorado County, California, for a building permit to construct a home on his own land near Lake Tahoe.
Sheetz, after a career spanning 50 years in construction, had planned to build a modest 1,800-square-foot manufactured home for his retirement. However, the hefty fee, established by the county legislature to fund roadwork necessitated by new developments, was deemed excessive by Sheetz, prompting him to take legal action against the county. He argued that the fee was not justifiable as it did not correlate with any real or estimated damage his small home could inflict on the area’s infrastructure.
The Supreme Court unanimously ruled that all government-imposed fees, even those enacted by legislatures, must directly correspond to the specific adverse impacts caused by a development. Justice Amy Coney Barrett, writing for the court, emphasized that property rights should receive equal protection, regardless of whether the imposing body is a legislature or an administrative branch. This decision clarifies that the Takings Clause of the Constitution, which prevents the government from taking private property without just compensation, applies to legislative actions as well.
El Dorado County’s response to the Supreme Court’s ruling was notably measured. Carla Hass, the Deputy Chief Administrative Officer, expressed satisfaction that the ruling only addressed a specific aspect of the dispute and left room for other defenses. The county remains optimistic about defending its program in further litigation, suggesting that reasonable permitting conditions could still be enforced under traditional land-use authority.
The case is set to return to the lower court to determine whether the fee meets the criteria of the unconstitutional conditions doctrine, which stipulates that government fees must be proportional to the public impacts of the proposed development. This ruling sets a significant precedent and could influence how local governments across the United States impose fees on property development, aiming to ensure that such fees are fair and directly related to the actual impacts of development activities.