National Review: The Supreme Court’s Chance to Revive a Neglected Civil Right

January 19, 2024 | By LARRY SALZMAN

On Tuesday, the Supreme Court will hear argument in Sheetz v. County of El Dorado. It is the fourth in a series of cases since 1987 involving the application of the unconstitutional conditions doctrine to the Takings Clause and land-use permits, namely, Nollan v. California Coastal Commission (1987), Dolan v. City of Tigard (1994), and Koontz v. St. John’s River Water District Management (2013). With Sheetz, the Court has an opportunity to reaffirm the theme it invoked in Dolan: “We see no reason why the Takings Clause, as much a part of the Bill of Rights as the First Amendment or Fourth Amendment, should be relegated to the status of a poor relation” relative to protections of other civil rights.

El Dorado County demanded $23,000 from George Sheetz as a condition of getting a building permit for a modest home. The money pays for road building that the county purports is necessary to accommodate new development. No one in the case disputes that the government can require a property owner to offset public costs arising from the impact of private development.

The central concern of the Court’s prior cases, however, is halting the abuse of power in the permitting process. The government can easily leverage its permitting authority to take more money or property than is justified, cloaking an uncompensated taking of private property for public use under the guise of its police power to mitigate a proposed development project’s impact. In Nollan, Dolan, and Koontz, the Court held such excessive demands to be an “unconstitutional condition” on the exercise of property rights.

In Nollan, the California Coastal Commission refused to issue a permit to a coastal property owner to remodel a home until he dedicated the beachside portion of his property for public use. The Commission might have gotten the beach by using eminent domain, but that would have triggered the Fifth Amendment’s requirement to pay the owner just compensation for the taking. By making it a condition of issuing a permit, the Commission stood to get the property for free. The Court saw the Commission’s “exaction” as an evasion of its constitutional duty — what Justice Scalia (writing for the Court) called an “out-and-out plan of extortion.” The case established that, for a land-use permit exaction to be constitutional, there must be a close nexus between the exaction and the proposed development’s adverse public impact.

In Dolan, the owner of a hardware store in Oregon was required to dedicate a portion of her property for a bicycle path and flood control. Building upon Nollan, the Court held that exactions not only need a nexus to a proposed development’s impacts but also that there must be “rough proportionality” between the size of the exaction and the purported project impacts.

In Koontz, a Florida regulatory agency conditioned its permission for commercial development on the property owner paying money to restore offsite wetlands as an alternative to dedicating land. The Court took up the case to say that the “nexus” and “rough proportionality” requirements applied to demands for money from permit applicants as well as demands for real property. The Court wrote that a contrary rule would make it “very easy for land-use permitting officials to evade the limitations of Nollan and Dolan.”

Sheetz presents the Court with another way in which local governments have come to evade the limits of Nollan and Dolan. State courts in California and some other states have held that the nexus and rough proportionality tests do not apply to monetary exactions set by a legislative body, like a city council, but only to permit conditions imposed “ad hoc” by land-use planning officials (as was the case in Nollan, Dolan, and Koontz).

In Sheetz’s case, the El Dorado County Board of Supervisors enacted an ordinance imposing “traffic impact mitigation” fees on all new single-family home development and, because no land-use planning official had discretion in whether (or in what amount) to charge it, the lower court said that those fees are not subject to any limits under the unconstitutional conditions test. In the county’s view, individuals are adequately protected against legislative fees set too high by the political process. If enough people think they are abusive, they can vote for politicians who will lower them.

Of course, the Takings Clause protects individual rights against majoritarian impulses to take property without fair compensation. As Sheetz argues, nothing about the Takings Clause or the unconstitutional conditions doctrine exempts legislative actions from constitutional scrutiny, and adopting the County’s novel exception would swallow the rule laid down by Nollan, Dolan, and Koontz. It would incentivize governments to dress up extortionate demands of money and property from land-use permit applicants in legislative garb to avoid constitutional review.

In recent years, the Court has aimed to elevate the protections afforded by the Takings Clause to the status of other celebrated civil rights. Knick v. Township of Scott (2019) opened federal courthouse doors to Takings Clause claimants. Cedar Point v. Hassid (2021) strengthened Takings Clause protection for the right to exclude others from one’s private property. Tyler v. Hennepin County (2023) enforced the Takings Clause to protect a homeowner’s right to possession of her home equity. Sheetz now comes to the Court asking it to confirm the role of the Takings Clause in securing one’s right to build on property free of predatory conditions by the government. It should.

This op-ed was originally published in National Review on January 9, 2024.