Impact fees in California may be in jeopardy in 2024, pending the outcome of a high stakes Supreme Court case…

Sheetz v. County of El Dorado (United States Supreme Court Docket # 22-1074), is a case that came out of Placerville, CA and was granted certiorari by the Supreme Court of the United States (SCOTUS) in September on a challenge of a property owner to El Dorado County’s Traffic Impact Mitigation Fee (TIF) requirement as a condition to their development permit (for a manufactured single-family home). The gist of the Petitioner, George Sheetz’, argument is that the TIF is unconstitutional and violates the Takings Clause, because the County did not make a determination showing an individualized relationship between the project’s impacts and the need for road improvements (represented by the TIF), in violation of SCOTUS precedents.

SCOTUS will have an opportunity to clarify the required showing of a “nexus” that the local government must make to

apply impact fees to a development project. This could have potentially huge implications for impact fee programs – especially in CA –which is a state where cities and counties rely heavily on impact fees to fund local improvements and other programs. Understandably there are many development-related interests writing amicus briefs in support of the Petitioner’s position, while many local and state interests – like the CA State Association of Counties, League of California Cities, and CA Special Districts Association – have written in support of the Respondent (El Dorado County).

The new future of Impact Fees should be decided in 2024, with oral arguments in front of SCOTUS scheduled for January 9 next year. See Allen Matkins and/or the San Francisco Chronicle for more details on the case. 

To see how significant these impact fees can be for both cities and developers, see our Fee Comparison studies from earlier this year.

In October this year the Governor signed SB410 into law, and proponents are hopeful it will help speed up electric grid expansion to accommodate ever-increasing demand, as well as project-level electrification needs, and provide more accountability by the energy providers. Under the bill, by October 2024, the Public Utilities Commission (PUC) must “Establish reasonable average and maximum target energization time periods” to “ensure that work is completed in a manner that minimizes delay in meeting the date requested by the customer to the greatest

extent possible and prioritizes work in a manner consistent with Sections

932 and 933.” SB410 also requires the PUC to “establish a procedure for customers to report energization delays to the commission” and creates other reporting requirements for energy providers like PG&E to abide by.

SB410 is only part of the solution to the larger energy problem for CA, but if it can help customers get more reliable energization schedules, and speed up the energization timetable that currently beleaguers new developments across the state, then it is at least a good start. For more commentary on SB410’s impact, see the Canary Media article.

The federal definition of “wetlands” under the Clean Water Act was revised earlier this year, in a move that may simplify permitting processes for new development around the US. Under the new definition, the Clean Water Act only applies to “wetlands with a continuous surface connection” to bodies of water, a narrowed definition following years of legal disputes. This change helps narrow the EPA’s definition of “waters of the United States” which dictates what types of waterways and wetlands fall under federal jurisdiction.

The EPA’s Clean Water Act is enforced at the state level in CA through CEQA. Part of the CEQA analysis required for new development includes surveying the building site for wetlands. In the past, discovery of a wetland on the building site, would frequently default into requiring review by the U.S. Army Corps

of Engineers because of the broadly inclusive definition of wetlands under the Clean Water Act. Once it was determined that a wetland was present, through the CEQA review, the applicant would be required to get additional approvals from the Army Corps of Engineers – with assistance from the local agency and the Regional Water Quality Control Board – in order to develop the land. The narrower definition of wetlands basically takes the issue out of federal jurisdiction and allows it to be handled by state and local agencies.

The removal of the Army Corps of Engineers as an agency requiring review and approval should benefit developments as an ‘addition by subtraction’. Less agencies + less processes = less time and money spent on chasing approvals. More here from CNN.

Small single-family residential additions in Oakland, CA can turn out to be a bit more complicated to entitle and permit than you might expect. A 65-sf addition to the back of an Oakland residence, that simply enlarges 2 existing bedrooms and a bathroom by 2-1/2’ along the back wall of the home, still requires planning review prior to acquiring a building permit, a process that can take several months (intake of our building permit application has already been pending for a month). 

While a small residential addition

like this may qualify for a design

review exemption (DRX), adding an accessory structure in your backyard, like we are at another single-family home project in Oakland, will trigger a more substantial planning review unless the new structure adds less than 10% of new floor area to the property. So, if you have plans for a new (separate) home office or backyard gym or studio in Oakland, be prepared to navigate these additional entitlement processes and potentially add a few months (or more) to your project schedule.