Are excessive impact fees unconstitutional? SCOTUS will decide
January 11, 2024
The US Supreme Court (SCOTUS) on Jan. 9 heard oral argument in a landmark property rights case involving excessive impact fees.
Sheetz v. County of El Dorado is the latest case on the question of impact fees and their role in the modern American home-building experience. The nine-member Court heard from attorneys representing George Sheetz, a California home builder, the State of California, and the US government.
Builders weigh in on excessive impact fees
The National Association of Home Builders (NAHB) and several state building industry associations filed amicus briefs in support of Mr. Sheetz. BIAW and some of our member builders have been heavily involved with signing onto amicus briefs, monitoring this case closely as it came before the court.
SCOTUS accepted review on the question of whether a permit exaction is exempt from the unconstitutional conditions doctrine as applied in Nollan and Dolan purely because the legislature authorized it. Simply put, Mr. Sheetz is asking for the Court to decide whether the tests from Nollan/Dolan (i.e., “essential nexus” and “rough proportionality”) are to be applied when an exaction comes from the legislature.
Burden shouldn’t rest on just a few
Paul Beard, attorney for Mr. Sheetz, explained the question before the Court even more simply:
[…] everyone loves good roads and schools and public infrastructure, so the government certainly has many tools at its disposal, including taxes, to pay for those. What we’re saying is that the government can’t select a few…property owners who happen to need a permit at any given time to select them to bear the burdens of paying for that public infrastructure…all Nollan and Dolan do is ensure that that’s not happening, that what the government is doing is mitigation and nothing more.
It was clear from the arguments yesterday this is an issue all the justices understand. Impact fees, beyond mere mitigation, negatively impact home builders, homeowners, and Americans generally. Especially when it comes to impact fees over $23,000.
Whether in the courts or before the state legislature, BIAW is working to remove impact fees as a barrier to the American dream of homeownership. We look forward to the Court’s decision in Sheetz. We hope they recognize legislative exactions are not exempt from scrutiny under Nollan and Dolan.