In other words, the Fifth Amendment’s Takings Clause does not distinguish between legislative and administrative land-use permit conditions. On the point of this case, the Takings Clause applies equally to legislative takings affecting groups of projects and administrative takings targeting individual projects. This decision is instructive for impact fees and other types of exactions, which commonly are applied to classes or types of uses.

The Court clarified that there is no constitutional, historical, or precedential basis to differentiate between these scenarios. Thus, the Takings Clause prohibits both legislatures and administrators from imposing unconstitutional conditions on land use permits.

The Court remanded the case to the California courts to determine, under the principles enunciated (and past precedents explained), if there was an unconstitutional taking without compensation.

Justice Barrett and the authors of three brief concurring opinions point out that key issues remain to be resolved in this remanded case or future litigation: the validity of this traffic impact fee; whether a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development; whether the elements of the Taking Doctrine apply the same way within or outside a permit scheme; and in general how Regulatory Taking law applies to permit conditions, including impact fees assessed through “reasonable formulas or schedules” on classes of developments.

This last item has land use lawyers and planners on alert. The Kavanaugh concurring opinion, joined by Justices Kagan and Jackson, presages more jurisprudence on the “longstanding government practice” of imposing “permit conditions” generally and “impact fees” in particular, “through reasonable formulas or schedules” on classes of developments. SCOTUS has an abiding interest in municipal land use decision making.

Here are the facts. As a condition of receiving a residential building permit for a lot with a prefab home, Sheetz was required by the County to pay a $23,420 traffic impact fee. The fee was part of a “General Plan” enacted by the County to address increasing demand for public services spurred by new development.

The fee amount was not based on the costs of traffic impacts specifically attributable to Sheetz’s particular project, but rather on a rate schedule that took into account the type of development and its location within the County.

Sheetz paid the fee under protest, obtained his permit, and sued, claiming that conditioning the building permit on the payment of a traffic impact fee constituted an unlawful “exaction” of money in violation of the Takings Clause.

In Sheetz’s view, the Court’s decisions in Nollan v. California Coastal Comm’n, 483 U. S. 825, and Dolan v. City of Tigard, 512 U. S. 374, required the County to make an individualized determination that the fee imposed on him was necessary to offset traffic congestion attributable to his project. These cases require an “essential nexus” and “rough proportionality” between government demands and the impact of the proposed land use.

The Barrett decision is a condensed survey of Regulatory Taking jurisprudence. It reads as an authoritative black letter treatise. And it weaves together the leading precedents seamlessly into a coherent whole.

“When the government wants to take private property to build roads, courthouses, or other public projects, it must compensate the owner at fair market value. The just compensation requirement comes from the Fifth Amendment’s Takings Clause, which provides: “nor shall private property be taken for public use, without just compensation.” By requiring the government to pay for what it takes, the Takings Clause saves individual property owners from bearing “public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U. S. 40, 49 (1960).
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“While States have substantial authority to regulate land use, see Village of Euclid v. Amber Realty Co., 272 U. S. 365 (1926), the right to compensation is triggered if they “physically appropriat[e]” property or otherwise … interfere with the owner’s right to exclude others from it, Cedar Point Nursery v. Hassid, 594 U. S. 139, 149–152 (2021). That sort of intrusion on property rights is a per se taking. Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419, 426 (1982).
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"Different rules apply to State laws that merely restrict how land is used. A use restriction that is “reasonably necessary to the effectuation of a substantial government purpose” is not a taking unless it saps too much of the property’s value or frustrates the owner’s investment backed expectations. Penn Central Transp. Co. v. New York City, 438 U. S. 104, 123, 127 (1978); see also Lucas v. South Carolina Coastal Council, 505 U. S. 1003, 1016 (1992) (“[T]he Fifth Amendment is violated when land-use regulation does not substantially advance legitimate state interests or denies an owner economically viable use of his land” ….

“Permit conditions are more complicated. If the government can deny a building permit to further a “legitimate police-power purpose,” then it can also place conditions on the permit that serve the same end. Nollan, 483 U. S., at 836. Such conditions do not entitle the landowner to compensation even if they require her to convey a portion of her property to the government….

“Thus, if a proposed development will “substantially increase traffic congestion,” the government may condition the building permit on the owner’s willingness “to deed over the land needed to widen a public road.” Koontz v. St. Johns River Water Management Dist., 570 U. S. 595, 605 (2013).

“We have described permit conditions of this nature as “a hallmark of responsible land-use policy.” Ibid. The government is entitled to put the landowner to the choice of accepting the bargain or abandoning the proposed development. … The bargain takes on a different character when the government withholds or conditions a building permit for reasons unrelated to its land-use interests.
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Imagine that a local planning commission denies the owner of a vacant lot a building permit unless she allows the commission to host its annual holiday party in her backyard (in propertyspeak, granting it a limited-access easement). The landowner is “likely to accede to the government’s demand, no matter how unreasonable,” so long as she values the building permit more. Koontz, 570 U. S., at 605.
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So too if the commission gives the landowner the option of bankrolling the party at a local pub instead of hosting it on her land…Because such conditions lack a sufficient connection to a legitimate land-use interest, they amount to “an out-and-out plan of extortion.” Nollan, 483 U. S., at 837.

These unusual illustrations and the invocation of the word extortion from the Nollan case give extra emphasis to Justice Barrett’s focus on reasons for governmental land-use interests and what the Court sees as the tests for whether a land use decision or law causes what she terms as abuse. She goes on:

“Our decisions in Nollan and Dolan address this potential abuse of the permitting process. There, we set out a two part test modeled on the unconstitutional conditions doctrine. See Perry v. Sindermann, 408 U. S. 593, 597 (1972) (government “may not deny a benefit to a person on a basis that infringes his constitutionally protected interests”).

“First, permit conditions must have an “essential nexus” to the government’s land-use interest. Nollan, 483 U. S., at 837. The nexus requirement ensures that the government is acting to further its stated purpose, not leveraging its permitting monopoly to exact private property without paying for it. See id., at 841.

“Second, permit conditions must have “‘rough proportionality’” to the development’s impact on the land-use interest. Dolan, 512 U. S., at 391. 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. See id., at 393. This test applies regardless of whether the condition requires the land owner to relinquish property or requires her to pay a “monetary exactio[n]” instead of relinquishing the property. Koontz, 570 U. S., at 612–615.
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“Just as the Takings Clause “protects ‘private property’ without any distinction between different types,” Horne v. Department of Agriculture, 576 U. S. 351, 358 (2015), it constrains the government without any distinction between legislation and other official acts. So far as the Constitution’s text is concerned, permit conditions imposed by the legislature and other branches stand on equal footing. The same goes for history. In fact, special deference for legislative takings would have made little sense historically, because legislation was the conventional way that governments exercised their eminent domain power.
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“Precedent points the same way as text and history. …A legislative exception to the Nollan/Dolan test “conflicts with the rest of our takings jurisprudence,” which does not otherwise distinguish between legislation and other official acts. Knick v. Township of Scott, 588 U. S. 180, 185 (2019). That is true of physical takings, regulatory takings, and the unconstitutional conditions doctrine in which the Nollan/Dolan test is rooted.
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‘In sum, there is no basis for affording property rights less protection in the hands of legislators than administrators. The Takings Clause applies equally to both—which means that it prohibits legislatures and agencies alike from imposing unconstitutional conditions on land-use permits.”

SCOTUS has made clear that regulatory takings challenges may be made against legislative enactments and not just against disapprovals of or conditions imposed in administrative permits. And impacts fees are vulnerable. What remains regardless is the difficult to prove at trial the elements of a taking on the merits.