By Gqlshare

Copyright presstelegram

Editor’s note: This is the eighth installment in a series examining the roots of America’s housing crisis. To read the earlier pieces, visit the roots of today’s housing crisis. Seventy-two-year-old George Sheetz is not a rich man. He is not a greedy developer. But to officials in California’s El Dorado County, he is an ATM. In July 2016, Sheetz applied for a permit to place a modest 1,854-square-foot manufactured home for his family on a rural 10-acre lot on Fort Jim Road, just east of Sacramento. His simple goal was to live in a home away from the city where he and his wife could raise their grandson.

The county gave Sheetz a permit – but then demanded that he pay $23,420 for “traffic mitigation.” The fee is based on a formula and not tied to any particular traffic impacts caused by the Sheetz family living in their new home. Indeed, the fee is supposed to go towards such things as helping build a new interchange on Highway 50, a major arterial four miles away by the nearest road. Sheetz is hardly alone. In California, such impact fees on new homes range from $20,000 to $156,000, depending on the city. There are exceptions. A few years ago, a couple sought a permit to build an ordinary single-family home, but the Elk Grove city officials demanded they pay $250,000 for a new traffic light. It took a lawsuit by the Pacific Legal Foundation to put a stop to the demand.

Overall, fees account for between six and 18 percent of the cost of new homes. Moreover, such huge fees have a distinct exclusionary impact. The higher the fees, the fewer middle-income people will be able to afford the higher new-home costs.

Nor are such demands new. In the 1980s, the California Coastal Commission routinely demanded that homeowners surrender some of their property in exchange for development permits.

When the commission demanded that Patrick and Marilyn Nollan give up one-third of their land in exchange for a permit to replace a one-story bungalow with a two-story home, they sued, represented by PLF. The commission tried to justify the demand by saying it would relieve the “psychological barrier” to the ocean experienced by people driving along the coast. The Supreme Court declared the scheme to be an “out-and-out plan of extortion” that violated the Takings Clause of the Constitution.

Yet local governments persist. In a case from the 1990s, the city of Tigard, Oregon, demanded that, to enlarge her store, the owner of a plumbing supply business had to give up riverfront property and build a bike path. City officials claimed the bike path would alleviate traffic caused by the store. Once again, the Supreme Court put a kibosh on the scheme, holding that the city failed to demonstrate the demands were proportional to any impact caused by the development.

A couple of decades later, Coy Koontz volunteered to give away 11 of 15 acres of land he owned to the public for wetlands preservation, so that he could build some stores on the remainder. But the local water management district wanted more and demanded that Koontz spend around $150,000 to clean out some district irrigation districts miles away from his property.

But what about the California beachfront and the Oregon bike path cases? He asked. Simple, said the district, those cases demanded land, and we’re just asking for money. PLF took the case to the Supreme Court. Once again, the court held that since money, like land, is property, the district’s plan of extortion was unconstitutional.

In the case of George Sheetz, there might be a happy ending. After paying the fee under protest, he demanded a refund, arguing that it violated Supreme Court precedent. But the county had an answer: Unlike other permit demands, the traffic fee demanded of George Sheetz was set out on a map approved by the County Board of Supervisors. In other words, the fees were established by a legislative body before George Sheetz asked for his permit. Legislatively imposed exactions, the county said, were exempt from the Constitution. If that seems to you like a stunningly obscure distinction, that is because it was.

With the assistance of PLF, Sheetz took his case to the Supreme Court. In April 2024, the Supreme Court unanimously ruled in his favor. The case is now back in the lower courts.

It is difficult enough to buy a new home. When fees of tens of thousands of dollars are added on top of the already high cost to build a house, it is no wonder that we have an affordable housing crisis. But these cases are hardly the end of the problem.

Next, housing advocates hope, the court will take up demands by cities that developers build subsidized low-income housing in exchange for building permits. While low-income housing may be laudable, the cost shouldn’t be borne entirely by people trying to afford to buy a new home. James Burling is vice president of legal affairs at Pacific Legal Foundation, a nonprofit legal organization that defends Americans’ individual liberty and constitutional rights. He is the author of “Nowhere to Live: The Hidden Story of America’s Housing Crisis.”