Vanderbilt Law Review

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Even before the Supreme Court decided Nollan v. California Coastal Commission,' courts and scholars debated the wisdom and constitutionality of land use exactions and impact fees-government-imposed charges on the right to develop land. Many municipalities have long required developers to finance infrastructure improvements.s Fiscally drained municipalities, particularly big cities, had begun to use, or to consider using, exactions or their close cousins, "linkage" programs, as a means to finance a wider variety of government services.

The controversy these fees have generated reflects more general concerns about financing local government. Municipalities and their defenders justify exactions and impact fees as necessary to assure that new development pays its own way rather than imposing external costs on existing residents. Others, however, express concern that unconstrained municipalities might use exactions to "extort" money from outsiders inadequately represented in municipal political processes-principally landowners and prospective homebuyers.

The Court's decision in Nollan intensified the debate over exactions and impact fees. The Court held that a government may not condition approval of a permit on a landowner's sacrifice of an interest unrelated to the government's reasons for requiring the permit. The Court thus imposed what appear to be serious constitutional limits on municipal power to use exactions: The municipality can exact money from a developer only if it can demonstrate that its exaction is related to the harms caused by the developer's project.

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