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Impact fee programs like one in Pitkin County unconstitutional, attorney says

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Derek Draplin

(The Center Square) – An attorney who worked on a recent U.S. Supreme Court case striking down a local government’s use of “substantial” impact fees in California says similar fees in Pitkin County, Colorado, also are unconstitutional.

The court’s ruling in Sheetz v. County of El Dorado centered on a resident who wished to build a prefabricated house on his property, but the county charged a $23,420 traffic impact fee for a building permit.

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The court, using a two-part test “modeled on the unconstitutional conditions doctrine,” said permit conditions must have “essential nexus” to a local government’s land-use interests and must have “rough proportionality” to a development’s impact.

“A permit condition that requires a landowner to give up more than is necessary to mitigate harms resulting from new development has the same potential for abuse as a condition that is unrelated to that purpose,” the majority opinion written by Justice Amy Coney Barrett said.

Pitkin County, where Aspen is located, is known for its multi-million dollar real estate listings and has the highest median home price in Colorado at $953,650, according to the National Association of Realtors.

It’s also known for having high fees on development that go towards paying for affordable housing and roads. 

The county’s Employee Housing Impact Fee is used “to mitigate the increased demand for housing caused by employment generation associated with approved development,” according to county documents.

The county’s most-recently updated fee subsidy calculator shows a 6,000 square foot, locally occupied unit would have a fee of almost $98,000. The same size unit that’s not locally occupied would have a fee of almost $382,000.

The county estimates that the cost of its impact fee on what it described as a "second home" that was greater than 9,000 square feet was $488,047. That impact fee is used to subsidize the housing of employees who come to work for the county.

For the county’s Road Impact Fee, a 1,000 square feet residential addition would amount to a $5,468.12 fee.

The Pacific Legal Foundation, which served as co-counsel in the Sheetz v. County of El Dorado case, said fee programs like Pitkin County’s Employee Housing Impact Fee are forbidden under the unconstitutional conditions doctrine.

“This sort of fee program, which seeks to force individual homeowners to pay to address such quintessential public problems as affordable housing, is precisely what the doctrine of unconstitutional conditions forbids,” PLF Senior Attorney Brian Hodges, who worked on the El Dorado County case, said “Thankfully, the U.S. Supreme Court’s decision in Sheetz v. County of El Dorado protects property owners from permit extortion by holding such fees subject to review under the doctrine’s heightened standard of review.”

Pitkin County has not made any changes to its impact fees in the wake of the U.S. Supreme Court’s ruling, County Manager Jon Peacock said. He did not immediately respond to follow-up questions.