A recent decision by the U.S. Supreme Court could have ripple effects on the types of impact fees levied on new developments across the United States. Supreme Court justices unanimously ruled April 12 in favor of George Sheetz in Sheetz v. El Dorado County, in which the petitioner was required to pay a $23,420 county traffic-impact fee to build a prefabricated house on a lot he owned in Placerville, California. Sheetz paid the fee and successfully obtained the permit, but he also filed a lawsuit over the fee in state court, and the case ultimately made its way to the Supreme Court. Sheetz argued the traffic-impact fee imposed to obtain the needed permit constituted an unlawful exaction of money, in violation of the Constitution's Takings Clause, which says private property can't be taken by the government for public use without just compensation. He also argued two previous court cases in California — Nollan v. California Coastal Commission and Dolan v. City of Tigard — required El Dorado County to make an individualized determination that the fee imposed on him was necessary to offset traffic congestion attributable to his project. The Supreme Court in its decision ruled that nothing in constitutional text, history or precedent supports exempting legislatures from ordinary takings rules. Oscar Wei, deputy chief economist at the California Association of Realtors, said the impact of the ruling remains to be seen, but impact fees can affect the outright cost of a new home, as builders pass along those costs to buyers. The National Association of Realtors, which filed an amicus brief in the case, called the ruling a win for property rights.
Source: Philadelphia Business Journal; 4/22/2024