By: @Mustafa Hessabi
On April 12, the U.S. Supreme Court unanimously ruled that development impact fees and all similar land-use permit conditions are required to have an "individualized determination" under the Takings Clause and that any fee or condition must have an "essential nexus" to the government interest and must have "rough proportionality" to the impact of the development (known as the Nollan/Dolan test), regardless of whether the fee is applied on an ad-hoc basis or as part of a legislative enactment (e.g., an ordinance adopted pursuant to the Mitigation Fee Act).
In Sheetz v. County of El Dorado, Justice Barrett authored a narrow opinion which ultimately held that "[t]he Takings Clause does not distinguish between legislative and administrative land-use permit conditions." However, the justices specifically declined to analyze the merits of the particular traffic impact fees adopted by El Dorado County, adding that "[w]hether a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development is an issue for the state courts to consider in the first instance, as are issues concerning whether the parties' other arguments are preserved and how those arguments bear on Sheetz's legal challenge."
In a concurring opinion, Justices Kavanaugh, Kagan and Jackson made plain their intent to keep the impact of the ruling limited, stating: “Importantly, therefore, today’s decision does not address or prohibit the common government practice of imposing permit conditions, such as impact fees, on new developments through reasonable formulas or schedules that assess the impact of classes of development rather than the impact of specific parcels of property.” The case is now remanded to California state courts to consider the impact fees in light of this decision, and whether the fees in their current form meet the Nollan/Dolan test.
You can find more information regarding the case in a past CSDA blog post HERE, and you can find CSDA's amicus brief to the U.S. Supreme Court in support of El Dorado County HERE. CSDA will continue to monitor this issue for updates.
If you have any questions, please contact CSDA Chief Counsel Mustafa Hessabi at mustafah@csda.net.
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