Supreme Court Rules on Permit Fees

[Nomad]

In a landmark decision, the U.S. Supreme Court unanimously ruled that property owners have the right to challenge hefty fees slapped on them by local governments. This ruling came while deciding a case of George Sheetz, who had filed a case against El Dorado County that charged him a whopping $23,420 traffic impact fee. So, what's the big deal about this verdict? Well, it means that local governments can't just throw any fee they want at property owners.

If you want to learn more about this ruling, you can check this article

 

[Elissa B]

This is interesting as more and more jurisdictions are raising such fees.

 

[Director Doug]

Distinguish between a permit fee and an impact fee. A permit fee is intended to pay for the process and service of reviewing and inspecting building activity. An impact fee is intended to offset the "immediate" impacts of development on infrastructure and services such as roads, schools, parks, libraries, etc.

 

[Eric]

Distinguish between a permit fee and an impact fee. A permit fee is intended to pay for the process and service of reviewing and inspecting building activity. An impact fee is intended to offset the "immediate" impacts of development on infrastructure and services such as roads, schools, parks, libraries, etc.

Good point, @Director Doug. The various news reports covering the Supreme Court's ruling appear to use the terms "permit fee" and "impact fee" interchangeably, when really it was a traffic impact fee that was at issue here. Regardless, the point of the ruling is that legislatures (e.g., city/county governments) will now be subject to Fifth Amendment regulatory takings analysis (i.e., the Nollan and Dolan standard) just like executive/administrative branches of government historically have been.

I thought the consequences for local governments were best summarized by the National League of Cities (see this article):

"local governments that impose impact fees will now be subjected to a standard requiring them to demonstrate the relationship and relative impact of the development on the community. Specifically, cities will have to show that conditions (impact fees) to obtain a land-use permit have an “essential nexus” (relationship) to the government’s land-use interest and a “rough proportionality” between the weight on the property owner and the development’s effects of the proposed land use."

Essentially, all this means is that local governments will now be subject to heightened scrutiny over legislatively imposed impact fees. I imagine most impact fees are already reasonable and will now just need to be backed up with Nollan and Dolan justifications ("essential nexus" and "rough proportionality") to remain on the books.

 

[FMB]

Seems reasonable. Everyone should have the right to challenge the validity of any federal, state, or local fine or fee. Due process.