Frequently asked questions about Sheetz v. El Dorado

January 08, 2024 | By BRIAN HODGES

What is the legal question in Sheetz?

  • In 2016, George Sheetz bought a vacant lot in rural El Dorado County, California, and planned to build a small, manufactured home where he and his wife would live in retirement and raise their grandson. But when George applied for a county building permit, he was told he would have to pay a so-called traffic impact fee of more than $23,000.
  • The County’s permit fee requirement, adopted legislatively in 2004, aimed to shift the cost of new roads and road improvements onto new development.
  • George paid the fee under protest and filed a lawsuit in state court, arguing the fee violated the unconstitutional-conditions doctrine established by three Supreme Court decisions—PLF wins in Nollan v. California Coastal Commission (1987) and Koontz v. St. Johns River Water Management District (2013), as well as Dolan v. City of Tigard (1994). The rulings powerfully rebuked government extortion through the permit process by limiting conditions and fees to what’s proportional and related to a proposed project.
  • Taken together, these Supreme Court decisions should have protected George from the County’s exorbitant demand. But over the years, California’s and some other courts have evaded Supreme Court precedents by creating a massive loophole that allows city councils and other legislative bodies to make such demands free of meaningful limits.
  • George is now asking the U.S. Supreme Court to reaffirm that property rights don’t get less protection depending on which branch of government violates them.

Why should Americans care about this case?

  • This case should matter to all Americans because property rights are the necessary precursor to the freedom to live, work, and prosper. These rights are woven throughout the Constitution and hold the key solutions to many social problems dominating public debate, from housing shortages to environmental pollution. They are also essential to promoting beneficial social aims, such as economic progress and equality before the law.
  • Too often, government bureaucrats relegate property rights to second-class status among other civil liberties, such as due process and freedom of thought. It is important that the Supreme Court extend the unconstitutional conditions doctrine it established in Nollan, Dolan, and Koontz to protect citizens’ property rights in permitting, regardless of the processes’ origins.

When will the case be argued in the Supreme Court, and when will its decision be issued?

  • Sheetz v. County of El Dorado will be argued at the Supreme Court on Tuesday, January 9, 2024, with a decision to come sometime before the end of June 2024

If the Supreme Court rules in favor of Mr. Sheetz, what happens then?

  • If the Court rules in Mr. Sheetz’s favor, local governments will no longer be able to use the cover of legislation to circumvent the Supreme Court’s ruling, in Nollan, Dolan, and Koontz, that government cannot weaponize the permitting process to extort more land or money from property owners than is appropriate.

What would a loss at the Supreme Court mean?

  • While the Supreme Court has previously established that government cannot weaponize the permitting process to extort more land or money from property owners than is appropriate, a loss in this case would provide state and local legislatures with a loophole to continue holding property rights hostage for exorbitant fees.
  • This will result in higher home prices across the nation and fewer homes being built.

Aren’t impact fees needed to offset the cost of public services created by new development?

  • The Supreme Court has long recognized that government can charge fees to mitigate actual public impacts caused by private projects. But those fees must be sufficiently proportional and related to a proposed project.
  • In this case, El Dorado’s impact fees single out some property owners to pay a disproportionate share of the cost of public amenities that are used by everyone. This is unfair, and the Supreme Court has repeatedly said it’s unconstitutional.

How can El Dorado’s fees be extortionate when they are not discretionary? The fee schedule is set in advance by the legislature, not on the whim of a local official.

  • George Sheetz was forced to pay a so-called traffic impact fee that amounted to more than $23,000. Although the fee schedule was set in advance, in this case it was nothing more than an exorbitant ransom to pay for permission to build a small, manufactured home. It unfairly imposed costs that had nothing to do with his project.
  • It doesn’t matter if the exorbitant fee was imposed by an individual bureaucrat or a legislator. It’s still a violation of property rights.

When these fees are imposed by a legislature, isn’t it more legitimate than if a bureaucrat imposes them? Shouldn’t courts defer to the will of the people?

  • Demanding fees that go above and beyond what is proportional and related to a land use project that’s subject to a government permit is a property taking under the Fifth Amendment. This is true whether imposed by bureaucrats or lawmakers. Property rights don’t get less protection depending on which branch of government violates them.

Would it be too costly for governments to do a site-specific analysis for impact fees? Should developers bear the cost of site-specific analyses?

  • Because the government is conditioning an owner’s right to use his property on the payment of supposed “mitigation” fees, it should bear the initial burden of showing that the fee is sufficiently related to identified project impacts. This should not be hard to do if the government is being honest.

If government can’t impose the cost of new development impacts onto newcomers, does that undermine the rationale of Prop 13? How else are communities supposed to raise money for services, which they can’t through increased property taxes?

  • Nollan and Dolan don’t absolve new owners of their obligation to mitigate negative impacts. They simply stop the government from demanding more than that. The owner will also be subject to lawful property taxes and user fees to pay their fair share of public services.

Would a win impact clean water agencies?

  •  No. Owners will still be required to mitigate impacts to clean water and must still pay user fees.