Sheetz v. County of El Dorado

Question Presented

Is a permit exaction exempt from the unconstitutional conditions doctrine, as applied in Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 837 (1987) and Dolan v. City of Tigard, 512 U.S. 374, 391 (1994), simply because it is authorized by legislation?

Introduction and Summary of Argument

The so-called “legislative exception” to exactions, which some courts have carved out from the essential nexus and rough proportionality requirements in Nollan/Dolan, is premised on politics being a cure-all for constitutional infirmities. Not only is this wrong as a matter of law, it is wrong as a matter of political theory and economics. Shifting costs which rightfully should be borne by all citizens onto newcomers is a predictable result of local political realities, not an unintended or undesired outcome that the electoral process will remedy. To the extent cost-shifting enabled by the “legislative exception” imposes special burdens on housing development, it also worsens a longstanding housing affordability crisis in California and other states that recognize the “legislative exception.”

The core principle of Nollan/Dolan is that governments may not use the land use permitting process to take private property for which the Constitution requires payment. In Koontz v. St. Johns River Water Mngmt. Dist., 570 U.S. 595 (2013), the Court confirmed that Nollan/Dolan principles apply to monetary demands made of land use applicants. Id. at 604-05. This Court has not prohibited all impact fees, but only those which lack an “essential nexus” and “rough proportionality” to the expected impacts of the project for which a permit is sought. Nollan, 483 U.S. at 837; Dolan, 512 U.S. at 391.

These decisions draw no distinction between exactions made by elected legislatures or appointed boards, or exactions made through laws of general applicability or project-by-project review. See Nollan, 483 U.S. at 836 (making an analogy to a hypothetical state law as an example of unconstitutional monetary exactions). Instead, this Court has made clear that “[t]he Takings Clause is designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Arkansas Game & Fish Comm’n v. United States, 568 U.S. 23, 31 (2012) (emphasis added). 

As the costs of public infrastructure have increased, the protections against takings guaranteed by the Fifth and Fourteenth Amendments have only grown in importance. In some cases, impact fees pave the way for needed housing supply by ensuring that new development pays for its own new government services. However, local policymakers may also find it politically expedient to use the permitting process as a vehicle to reallocate growing tax burdens. This is both unconstitutional and creates the risk for impact fees that are set so high as to dissuade development altogether, tightening housing supply and exacerbating unaffordability. By holding that exactions, including legislative exactions, must meet nexus and proportionality requirements, this Court’s jurisprudence can facilitate new housing construction—or at least prevent disproportionate legislative exactions that discourage residential development. 

Accordingly, this Court should reject the purported “legislative exception” to the exactions doctrine.