Supreme Court rules on excessive land development fees in California case

 April 15, 2024
In a landmark decision, the U.S. Supreme Court has clarified the scope of fees that local governments can impose on developments, Fox News reported.The court unanimously ruled that fees like those for building permits must directly correlate with the actual damages caused by development.George Sheetz, a retiree who purchased a plot in El Dorado County, California, was the focal point of this case. In 2016, after retiring from a 50-year career in construction, Sheetz bought a vacant lot near Lake Tahoe with plans to build his dream retirement home.

To proceed with building, Sheetz was required to pay a "traffic impact mitigation" fee exceeding $23,000. This fee, legislated by the county to fund roadwork, was deemed necessary to manage the increased traffic the new development would allegedly cause.

However, Sheetz contested the fee's size, arguing that it was disproportionate to the actual impact his modest 1,800-square-foot home would have on the area's traffic.

High Court Challenges Local Government Fees

Upon paying the fee, Sheetz initiated a lawsuit against El Dorado County. He claimed the fee violated the Constitution by not being commensurate with the actual damage his development would inflict. The local courts initially sided with the county, citing the legislative basis for the fee. These courts maintained that the fee was justified as it served a public good, similar to other community fees used for parks and police services.

The Supreme Court, however, saw things differently. It ruled that all fees must strictly reflect the actual adverse impacts they are meant to mitigate, adhering to the Takings Clause of the Fifth Amendment, which protects against the taking of private property without just compensation.

Justice Barrett Emphasizes Property Rights

In her written opinion, Justice Amy Coney Barrett highlighted the importance of equal protection of property rights, irrespective of whether the decisions come from legislative or administrative bodies.

This pivotal ruling emphasizes that property rights must be safeguarded from excessive governmental fees that do not align with the actual damage caused by developments. Paul Beard, Sheetz's attorney, praised the decision. He commented that the ruling prevents local governments from holding building permits "hostage" in exchange for excessive fees, which he equated to extortion.

Local Official Responds to Supreme Court Decision

El Dorado County's Deputy Chief Administrative Officer, Carla Hass, stated that the decision was narrowly focused and reassured that the county could still impose reasonable fees under its traditional land-use authority.

"The County looks forward to defending its program in any further litigation," Hass expressed, indicating that the county plans to continue its legal battle concerning the fee's justification.

The case will now return to a lower court to determine if the $23,000 fee was in fact proportional to the actual impact caused by Sheetz's planned home.

A Victory for Home Builders and Property Owners

George Sheetz expressed his frustration with the initial fee requirement, which spurred his legal challenge. "That's when I started getting pissed off. I said, ‘this is ridiculous.’," Sheetz recounted the moment his battle began.

This ruling has been heralded as a significant victory for property owners and prospective home builders, who often face hefty fees when looking to develop their properties. It sets a precedent that could influence how local governments across the country implement and justify development-related fees.


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