The U.S. Supreme Court has ruled in favor of George Sheetz, who was charged a $23,000 fee to build on his own land in El Dorado County, California. The case is bound to affect governments, builders, and homebuyers across the state and nation.
In 2016, Sheetz and his wife bought 10 acres near Placerville as the site for a manufactured home of 1,800 square feet. The installation required a building permit and El Dorado County tacked on a fee of $23,000 for “traffic impact mitigation.”
Sheetz paid the fee under protest and sued El Dorado County on the grounds that the $23,000 was not tied to any estimate of the actual impact his single-family dwelling would have on local traffic. In effect, his home was treated as an entire subdivision or shopping mall.
Sheetz lost in trial court and the state appeals court. When the California Supreme Court declined to review the case, Sheetz took it to the U.S. Supreme Court. On April 12, the high court found in his favor.
“Conditions on building permits are not exempt from scrutiny under Nolan and Dolan just because a legislative body imposed them,” wrote Justice Amy Coney Barrett in a unanimous decision for the court. “In fact, special deference for legislative takings would have made little sense historically, because legislation was the conventional way that governments exercised their eminent domain power.” The Takings Clause, wrote Barrett, “prohibits legislatures and agencies alike from imposing unconstitutional conditions on land-use permits.”
Sheetz’s attorney Paul Beard told reporters that “holding building permits hostage in exchange for excessive development fees is obviously extortion.” The Court “put a stop to a blatant attempt to skirt the Fifth Amendment’s prohibition against taking private property without just compensation.”
El Dorado County administrator Carla Hass countered that the ruling “answers only a narrow question on which the parties already agreed” and does not cancel county government’s ability to impose reasonable permitting conditions. A lower court will determine whether the fee charged Sheetz is proportionate to the impact caused by his single-family dwelling, which can’t amount to much. As the parties work it out people across the country might review some realities.
Government fees and taxes are essentially a distinction without difference, whether or not they proceed from a legislature or unelected administrative body. Taxpayers in all states might total up their local fees and taxes to assess the overall burden the ruling class imposes upon them. Compare that with the conditions the taxes and fees are supposed to fix, and the benefits local governments bestow on themselves.
With affordable housing in short supply, taxpayers might expect governments to relax taxes and fees that impact housing. In San Francisco, for the most part, precisely the opposite is the case.
Soaring office vacancy rates prompted a push for conversion of office space to housing. In 2020, San Francisco voters approved Proposition I, which doubled the transfer tax rate on real estate sales of at least $10 million. Call it a tax or a fee, that hurt the prospects for converting large office buildings to housing, in a real-estate market already prohibitively expensive.
San Francisco’s high transfer taxes sent housing investors and developers to other markets. As even the city controller warned, San Francisco became “less attractive economically as a place to live.” And as home buyers might note, San Francisco is also less attractive for hygienic reasons.
El Dorado County, not far from Lake Tahoe, is a fine place to live, but the county government’s $23,000 traffic mitigation fee made it harder for George Sheetz to live there. Shot down at the local and state level, Sheetz bravely took it all the way to the Supreme Court. The high court rendered a victory over the pillage people, boosting property rights and liberty all across the land.
This article was also published in The American Spectator