Latest property rights fight comes before justices

When George Sheetz applied in 2016 to build a single-family home on property that he owned, the California county where he lived required him to pay a “traffic impact mitigation” fee, totaling more than $23,000, before it would issue the permit. The county issued the fee to cover costs that the new construction was likely to cause for the community. Sheetz paid the fee and received the permit, but he also went to court to challenge the constitutionality of the fee. Two state courts upheld the fee, but on Tuesday the Supreme Court will hear oral argument in Sheetz’s case.

This is the latest case in an ongoing battle over property rights. But interest groups on both sides also say that the court’s decision could affect the availability of affordable housing in California and other states.

The case began when Sheetz applied for a permit to construct a 1,854-square-foot manufactured home on a lot that he owns in the city of Placerville, where he and his wife intended to raise their grandson. The County of El Dorado told him that to receive the permit, he would need to pay a $23,420 traffic impact mitigation fee — $2,260 of which went to improvements for Highway 50, which runs through the county, and the rest to improve local roads. Sheetz paid the fee and received the permit one month later. He then went to state court to challenge the constitutionality of the fee.

In Nollan v. California Coastal Commission and Dolan v. City of Tigard, the Supreme Court held that if a government wants to require someone to give up property in exchange for a land-use permit, it must show that such a condition is closely related and roughly proportional to the effects of the proposed land use. Sheetz argued that the Nollan/Dolan test applied to his case as well.

The trial court rejected his argument, and the California Court of Appeals affirmed that decision. Pointing to decisions by the California Supreme Court holding that the Nollan/Dolan requirements only apply to development fees imposed “on an individual and discretionary basis,” the state court explained that the Nollan/Dolan test does not apply to fees – like the traffic impact mitigation fee – authorized by legislation.

Sheetz came to the Supreme Court last year, asking the justices to weigh in.

In his brief on the merits, Sheetz characterizes the traffic impact mitigation fee as an effort by the county to shift the burden of road improvements from taxpayers to the smaller group of developers and property owners who want to build on their land. But the county does not try to determine what effect a particular project will have on traffic, he observes, and it treats all single-family homes as having the same effect – no matter how small they are or where they are located.