Builders can challenge California’s development “impact fees,” the Supreme Court rules


Builders can challenge California’s development “impact fees,” the Supreme Court rules

David G Savage

April 12, 2024

The Supreme Court ruled Friday that developers and homebuilders in California can challenge fees commonly imposed by cities and counties for new roads, schools, sewers and other public improvements.

The justices said these “impact fees” could be unconstitutional if builders and developers are forced to pay an unfair share of the costs of public projects.

Developers argued that limiting California’s high fees for new construction would lead to the construction of more affordable new housing.

California state courts had blocked such claims when they arose from “a development impact fee imposed under a legally authorized fee program” applicable to new construction in a city or county.

But the Supreme Court’s 9-0 ruling opened the door to such challenges.

In previous cases from California, the Supreme Court limited the power of public officials to demand concessions from a property owner in exchange for a building permit.

In 1987, judges ruled in favor of the owner of a beach bungalow in Ventura, who was told he could not get a permit to expand his home unless he agreed to allow public access to the beach. The conservative majority described the demand as akin to “extortion” and said it violated the Fifth Amendment clause prohibiting the taking of “private property… for public use without just compensation.”

In a follow-up decision involving a shop owner who was forced to allow a cycle lane on her property, the court said the government cannot impose such special conditions on property owners unless it can show that the new development would cause direct harm to the community. community.

But in the decades since, it has been unclear whether this property rights rule also applies to development fees and in situations where the fees are set by legislation, rather than imposed on a single owner applying for a permit.

Judge Amy Coney Barrett said, “There is no basis for giving property rights less protection in the hands of legislators than in the hands of administrators. The Takings Clause applies equally to both, meaning it prohibits legislators and agencies from impose unconstitutional conditions on land use permits.”

The case arose when real estate owner George Sheetz sought a permit to place a manufactured home on a lot he owned in Placerville, near Sacramento. El Dorado County told him it was


pay a “traffic impact mitigation” fee of more than $23,000.

Some of the money would pay for upgrades to Highway 50, which runs through the area

while the reward for new and expanded roads


Sheetz paid the fee and got his license, then sued to challenge the fee as unconstitutional.


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