The cost of a new home in swanky Naples, Florida-home of charming shopping districts, lovely white-sand beaches, and more golf holes per capita than anywhere else in America-recently topped $450,000. Included in this cost is a staggering $33,000 impact fee bill from the county. Even amidst a meltdown in the housing industry and a severe economic slump, local politicians have refused to reconsider the high fees. Impact fees are levied by local governments on new developments to pay a share of the costs of providing public infrastructure for those developments. The money is used to improve sewers, roads, parks, and schools and has become increasingly important to local governments. For example, Naples's high fees are due, in part, to cuts in revenue at the state level and voters' rejection of a proposed sales tax increase to cover growth-related costs. Impact fees are not governments' only tool for financing public- infrastructure improvements; governments also may use their powers of eminent domain to require land dedications or payments in lieu of dedications. Often, a government will demand, as a condition precedent to approving a development project, a "physical exaction" (referring to a land dedication) or a "monetary exaction" (referring to a payment in lieu of dedication, also known as an impact fee).
The Fifth Amendment guarantees that private property shall not be "taken for public use, without just compensation."' Supreme Court takings jurisprudence, however, is murky; as even Justice Stevens admitted, "[T]he wisest lawyers would have to acknowledge great uncertainty about the scope of this Court's takings jurisprudence." Indisputably, judicial review of government-required land dedications-that is, physical takings of private property-is governed by the Takings Clause of the Fifth Amendment. Fee imposition does not take, condemn, or appropriate private property in any traditional sense, so it should not trigger the Takings Clause. But takings jurisprudence is not limited to the traditional understanding of taking, condemning, or appropriating property; Justice Holmes famously stated that a government regulation also can become a compensable taking if the regulation "goes too far."' Much uncertainty remains as to whether impact fees "go too far," and, more fundamentally, whether impact fees should be governed by the Takings Clause at all. Moreover, if the Fifth Amendment has an effect on impact fees, review of the fees will have to fit somewhere in the maze of takings jurisprudence.
While a unanimous Supreme Court recently cleaned up its muddled takings jurisprudence in Lingle v. Chevron U.S.A., the Court failed to clarify the future of monetary exactions like impact fees. In Lingle, Chevron brought a takings claim against Hawaii for passage of Hawaii's Act 257, which sought to protect independent gasoline dealers by, inter alia, limiting the rent that oil companies could charge lessee-owned stations. A lower court struck down the Act, reasoning that it did not "substantially advance a legitimate state interest." In overturning the lower court's decision, the Supreme Court bluntly expurgated the "substantially advances" test, claiming it was a due process inquiry that had "no proper place in the Court's takings jurisprudence." In so doing, the Court further clarified takings jurisprudence by endorsing four reasonably straightforward categories of takings: physical invasions, deprivations of all economically beneficial use, regulatory takings, and physical exactions. Whether monetary exactions fit into any of these four categories, however, is still unclear to scholars and courts.
Charles T. Switzer,
Escaping the Takings Maze: Impact Fees and the Limits of the Takings Clause,
62 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol62/iss4/6