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U.S. Supreme Court Ruling Empowers Developers and Property Owners to Challenge Excessive or Unjustified Impact Fees
An impact fee is a one-time payment levied onto a property developer by a local government meant to offset the new development's impact on public infrastructure. Impact fees frequently seen include water, wastewater, stormwater, roads, mobility, parks and recreation, public safety, library facilities, public art, public administration buildings and facilities, schools, inclusionary housing, and other in-lieu-of-fees. For many years, these impact fee programs — even ones based on poor methodologies — often went largely unchallenged.
The recent U.S. Supreme Court ruling in Sheetz v. County of El Dorado, No. 22–1074 (April 12, 2024), has empowered developers and property owners to challenge excessive or unjustified impact fees as unconstitutional and potentially seek damages and attorney fees. This in turn will cause many local governments to revisit the defensibility of their impact fee regimes.
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