US Supreme Court Addresses Real Estate Issue Related to Permit Fees

By: Laura Ferret, Esq.

April 19, 2024


The United States Supreme Court recently issued its ruling on a case that originated in our own backyard of El Dorado County in Sheetz v. County of El Dorado, California. Stemming from a dispute between a property owner and our local El Dorado County government, this case discusses the delicate balance between regulatory interests and individual property rights. Let’s delve into the case’s nuances and explore its implications for real estate law.

The Case Overview:

George Sheetz, a prospective homeowner with plans to build a manufactured home on a ten acre parcel near Lake Tahoe, faced an unexpected hurdle when applying for a building permit—a substantial “traffic impact” fee exceeding $23,000 imposed by El Dorado County. This fee, aimed at addressing increasing demand for public services spurred by new development, raised questions about its alignment with Sheetz’s property rights and legitimate land use interests. The fee amount was not based on the costs of traffic impacts specific to Sheetz’s property, but was instead based on a rate schedule uniformly applied to all such developments based on the type of development and location in the County.

Sheetz’s challenge drew upon the legal precedent set by Nollan v. California Coastal Commission and Dolan v. City of Tigard, which established criteria to prevent government abuse of permitting processes. These cases emphasized the necessity for permit conditions to demonstrate a nexus to government interests and proportionality to the development’s impact. As the Supreme Court stated in Sheetz, “when the government withholds or conditions a building permit for reasons unrelated to its legitimate land-use interest, those actions amount to extortion.”

The Supreme Court’s Decision:

In its ruling, the Supreme Court concluded that the California State Court(s) were incorrect in asserting that permit fee decisions imposed on a broad class of people through the legislative process was exempt from the Nollan-Dolan tests. Rather, the Supreme Court determined that in takings litigation it does not matter which branch of government authorized the taking, what matter is whether the government “has physically taken property for itself or someone else.” Consequently, the Supreme Court decided that the “traffic impact fee” imposed on Sheetz fell within the purview of the Nollan-Dolan framework, requiring scrutiny for nexus and proportionality.

Looking Ahead:

Sheetz v. County of El Dorado, California, now heads back to state courts for further deliberation on whether the $23,000 “traffic impact fee” El Dorado County imposed on Sheetz violates the nexus and proportionality test established by the Nollan-Dolan framework. This remand underscores the ongoing struggle to balance regulatory interests with individual liberties—a central concern in real estate law.


The Court’s recent holding in Sheetz v. County of El Dorado, California provides valuable guidance to local landowners facing regulatory hurdles in their developments.

At BPE Law Group, our team of experienced attorneys stands ready to assist clients with City or County permitting processes and appeals. Whether navigating regulatory hurdles or advocating for property rights, our attorneys are committed to delivering effective solutions and achieving favorable outcomes.

The information presented in this article is not to be taken as legal advice. Every situation is different. If you are facing a legal issue of any kind, get competent legal advice in your state immediately so that you can determine your best options.

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