US Supreme Court Crushes California “Impact Fees” as an Unconstitutional Taking

The US Supreme Court ruled on April 12 that individuals, developers and home builders in California may protest impact fees commonly imposed by cities and counties to supposedly pay for new roads, schools, sewers and other public improvements as unconstitutional taxes.

The Supreme Court focused on prohibition under the Fifth Amendment Taking Clause that prohibits state and local government for failing to pay fair value when infringing on citizens property rights. 

Almost all California’s 58 counties and 482 cities, towns, and villages began imposing “impact fees” after 2006 that can run between $21,000 to $157,000 per dwelling, and account for up to 18% of the cost of a new median sized home.  

Critics led by Shasta County Chairman of the Board of Supervisors Kevin Crye, blame the impact fees for restricting the new supply of affordable housing and thus spiking rents on young families.  Chairman Crye led Shasta County to be the first county in the state to terminate the fees.

Crye said that under the California Constitution, state and local taxes must be approved by a vote of the people.  But greedy politicians have ignored the constitutional requirements and administratively passed a blinding array of so-called impact fees to avoid a vote by effected residents.    

In a rare show of unity, Supreme Court voted 9-0 decision to vacated and remand a “traffic mitigation fee” of $23,420 charged to an elderly Eldorado County man that bought a modest trailer seven and a half years ago and put it on his small piece of property.  The rural county had claimed that the addition of one mobile home caused a countywide traffic burden.

The case seemed so important to the court that conservative Justice Barrett wrote the main opinion and was joined by liberal Justice Sotomayor.    Conservative Justice Kavanaugh and liberal Justice Kagan in a concurring opinion stated that government can continue to charge permit fees, but only if the permit fee is assessed through “reasonable formulas.”  This is a code word for fee can only cover the cost of issuing the building permit.

in Sacramento hailed the ruling as a significant victory for property rights

The Pacific Legal Foundation attorney Paul Beard that provided pro bono representation of the El Dorado County mobile homeowner, celebrated the victory: “Holding building permits hostage in exchange for excessive development fees is obviously extortion.”  Beard added “We are thrilled that the court agreed and put a stop to a blatant attempt to skirt the 5th Amendment’s prohibition against taking private property without just compensation.”