Are Impact Fees Going Away?

One of the key mechanisms governments use to finance their road improvements, their sewer maintenance and new schools is through impact fees. Every time someone approaches the local government to build a new building, they pay an impact fee, designed to cover the increased costs created by the new building.

This month, however, the United States Supreme Court developed two rules key to impact fees that must apply to all impact fees to avoid tripping the Fifth Amendment of the U.S. Constitution.

Those two rules, established through earlier case law, first state any restrictions on permitting, like impact fees, must be essential to the government’s purpose. Second, the rules state impact fees must be proportionate to the impact it looks to offset.

What this means for impact fees, local governments and developers is still to be determined, most likely through a significant number of lawsuits.

If you think you may have paid an impact fee that doesn’t meet those two rules, reach out to us immediately. The attorneys at The Orlando Law Group can review your case to ensure those two rules are met and provide counsel on the next steps.

Why did the Supreme Court rule on impact fees?

Ask any developer about impact fees, and they will most likely say they are too high and are a money grab by local governments.

For instance, if you want to build a 2,000-square-foot home in an unincorporated Orange County suburb, you will be forced to pay nearly $25,000 to acquire a permit.

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