The U.S. Supreme Court has issued a ruling in a case supported by the California Apartment Association challenging the constitutionality of a $23,000 traffic impact fee in Northern California.

CAA’s involvement included filing an amicus brief last winter.

The owner of the property, George Sheetz, argued that the fee, ordered by El Dorado County, violated the Fifth Amendment’s Takings Clause, which bars the government from taking private property for public use without just compensation. The California state courts refused to consider Sheetz’ argument, however, due to a judicially created loophole to the takings clause that allowed fees created by legislative action to bypass the scrutiny applied to other permit conditions.

The Supreme Court’s unanimous decision, handed down April 12, closes that loophole for legislatively created fees. Writing for the court, Justice Amy Coney Barrett stated simply, “The Constitution’s text does not limit the Takings Clause to a particular branch of government.”

The dispute over the $23,000 fee now returns to the lower courts to be considered under the proper test, which requires such permit conditions to be closely related and roughly proportional to the effects of the proposed land use. In other words, El Dorado County would need to show that the fee was reasonably necessary to offset the impact of traffic congestion attributable to the project – a single-family home – proposed by Sheetz.

Though the court’s ruling is relatively narrow, it has important implications for California’s housing crisis as costly conditions imposed by local governments can drive up the cost of building new housing. As noted in CAA’s amicus brief, affordable housing projects in California often exceed $1 million per unit to build, in part due to factors within the control of state and local governments.