The U.S. Supreme Court recently made two significant rulings to safeguard property rights, highlighting the power and significance of the Fifth Amendment’s Takings Clause.  In both of these cases, NAR submitted amicus briefs as evidence to help the courts make sound rulings – These cases, Sheetz v. County of El Dorado and DeVillier v. Texas, usher in a new era for property rights in the United States.

Sheetz v. County of El Dorado

In Sheetz v. County of El Dorado, California homeowner George Sheetz challenged the constitutionality of a fee that he was required to pay the county to receive a permit to build his home. The fee in question was a “traffic impact mitigation fee” imposed by El Dorado County.

The Supreme Court unanimously agreed with Sheetz that conditions on building permits should be subject to heightened scrutiny even if they were authorized by legislation. This ruling was a victory for Sheetz and a significant development in property rights law.

NAR and other housing groups filed an amicus brief last year. “Impact fees have real consequences for homeownership in America, particularly with today’s high interest rates and limited housing affordability. Many prospective home buyers are priced out of the market by the tens of thousands of dollars in impact fees imposed on the average property owner,” wrote NAR, the American Property Owners Alliance, the REALTORS® Land Institute, and the California Association of REALTORS®. Nationally, they said, the average impact fee on single-family homes exceeded $13,627 in 2019, while the costs in some states stretched much higher. In California, impact fees average more than $37,000. The groups also cited housing studies showing how a $1,000 increase in the median price of a new home pushes about 140,000 households out of the market.

The Court’s decision will now allow developers and home builders to challenge fees that are commonly imposed by cities and counties to pay for new public improvements and

infrastructure. As Justice Amy Coney Barrett wrote: “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.”

Sheetz’s case will now be sent back to the state courts for further review, given the Supreme Court’s ruling.

DeVillier v. Texas

In the case of DeVillier v. Texas, Richard DeVillier and other property owners whose land was damaged by flooding caused by actions of state agencies were allowed to proceed under a Texas state law cause of action. The flooding occurred when the State of Texas used portions of Interstate 10 as a flood evacuation route, installing a roughly three-foot barrier along the highway median to act as a dam.

The Supreme Court ruled in favor of DeVillier, stating that owners of property adversely affected by the flood evacuation barrier constructed by Texas should be permitted on remand to pursue their Takings Clause claims through the cause of action available under Texas law.

NAR joined the Texas REALTORS® and American Property Owners Alliance in filing an amicus brief in support of the landowners last year, saying takings like these can artificially increase real estate costs, restrict fundamental property rights, and hinder potential development opportunities.

Lawsuits can take years to resolve, but they are vital to NAR’s advocacy. The association has had numerous victories in local, state, and federal courts and is not hesitant to go all the way to the Supreme Court in defense of property rights.