Market Urbanism https://marketurbanism.com Liberalizing cities | From the bottom up Mon, 20 May 2024 17:46:55 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.1 https://i2.wp.com/marketurbanism.com/wp-content/uploads/2017/05/cropped-Market-Urbanism-icon.png?fit=32%2C32&ssl=1 Market Urbanism https://marketurbanism.com 32 32 3505127 Interrogating the Strong Towns “Ponzi Scheme” https://marketurbanism.com/2024/05/20/interrogating-the-strong-towns-ponzi-scheme/ https://marketurbanism.com/2024/05/20/interrogating-the-strong-towns-ponzi-scheme/#respond Mon, 20 May 2024 17:46:54 +0000 http://marketurbanism.com/?p=84016 NYU professor Arpit Gupta has channeled the annoyance of economists into a blog post directly calling out the Strong Towns "growth Ponzi scheme" line of argument.

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NYU professor Arpit Gupta has channeled the annoyance of economists into a blog post directly calling out the Strong Towns “growth Ponzi scheme” line of argument. Like Arpit, I’ve never found a clear accounting for the Strong Towns argument. The basic evidence, as Arpit shows, is in the opposite direction.

Strong Towns does good work and I was a dues-paying member for several years. But their argument against low-density growth is well into its second decade and is being spread widely enough to be taken seriously, which means asking hard questions and demanding rigorous accounting.

If Strong Towns or other Ponzi-supporters can’t bring the receipts, they can still retreat to some better-defended heights:

  • Growth may hurt central cities and inner-ring suburbs left behind by decamping residents and commerce;
  • Throwing tax subsidies at growth is usually a bad idea;
  • Growth may be fiscally unsustainable in a place where population is not growing; or
  • The federal tax-and-spending system is biased in favor of new construction.

But a retreat is a retreat. If Strong Towns falls back on these positions, the general “bailey” claim that “suburban growth is a Ponzi scheme” is torched.

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Mumbai upzoning https://marketurbanism.com/2024/05/17/mumbai-upzoning/ https://marketurbanism.com/2024/05/17/mumbai-upzoning/#respond Fri, 17 May 2024 14:18:40 +0000 http://marketurbanism.com/?p=83934 A 2017 increase in allowed floor area ratio in Mumbai had a tremendous impact on affordability by accidentally improving the economics of smaller apartments.

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Geetika Nagpal‘s job market paper, written with Sahil Gandhi, shows that a 2017 increase in allowed floor area ratio in Mumbai had a tremendous impact on affordability by accidentally improving the economics of smaller apartments.

(Note that the authors are updating the paper, so some of the following may change).

ABSTRACT:

Does relaxing zoning regulations increase affordable housing or simply trigger the building of new luxury units? This paper exploits a rule-based relaxation of the regulatory cap on building height and floorspace, the Floor Area Ratio (FAR), to answer this question in Mumbai, India. Leveraging granular panel data and exploiting variation in time and space, we find that the reform increased housing supply in treated areas by 28%, implying an elasticity of housing supply to the FAR of 1.59. The FAR relaxation increases the scale of development, resulting in higher investment in shared amenity space within the building. This increased public good provision facilitates an 18% decline in unit sizes, leading to a 29% decrease in apartment prices that allows lower-income households to access housing. We develop a structural model of housing supply and demand that incorporates the provision of amenity floorspace and shows that after the relaxation, average home buyer incomes are 3.18% lower. We use the estimated model to show that a further 5% rule-based relaxation would amplify the scale economies and increase the affordability gains from deregulation. Taken together, our results show that concentrating FAR relaxation can improve affordability.

Some quick notes:

  • The authors have access to excellent data, including detailed permit applications complete with floor plans and some mortgage applications.
  • The standard errors for all estimates are very large. The point estimates are the centers of large possible ranges, so don’t take them too seriously. The imprecision also weakens the total picture presented.
  • The authors’ most novel finding is that lower-income buyers prefer amenity space, such as children’s play areas & gyms. Shared amenities make more sense in bigger buildings. So bigger buildings get smaller apartments, which are cheaper.
The gym & play area are the top features of this Mumbai condo listing on nestoria.in

The last point left me with two questions the authors could answer pretty easily:

  • How do the “lower” and “higher” income purchasers relate to the overall income distribution?
  • What’s the distribution of amenity space as a function of building size? Are there big discrete jumps in (non-hallway) public space, or is it more of a continuum?

Excellent work and I look forward to its refinement.

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Colorado housing reform wins in Round 2 https://marketurbanism.com/2024/05/14/colorado-housing-reform-wins-in-round-2/ https://marketurbanism.com/2024/05/14/colorado-housing-reform-wins-in-round-2/#respond Tue, 14 May 2024 18:08:22 +0000 http://marketurbanism.com/?p=83861 Last year disappointed pro-housing advocates in Colorado, as Governor Polis’s flagship reform was defeated by the state legislature. But Polis and his legislative allies tried again this year, and yesterday the governor signed into law a package of reforms which cover much of the ground of last year’s ill-fated HB23-213. HB24-1152 is an ADU bill. […]

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Last year disappointed pro-housing advocates in Colorado, as Governor Polis’s flagship reform was defeated by the state legislature. But Polis and his legislative allies tried again this year, and yesterday the governor signed into law a package of reforms which cover much of the ground of last year’s ill-fated HB23-213.


Photo by Acton Crawford on Unsplash

HB24-1152 is an ADU bill. It applies to cities with populations over 1000 within metropolitan planning areas (so, the Front Range – home to most of Colorado’s major cities – along with Grand Junction), and CDPs with populations over 10,000 within MPOs. Within those jurisdictions, the law requires the permitting of at least 1 ADU per lot in any zone that permits single-family homes, without public hearings, parking requirements, owner-occupancy requirements, or ‘restrictive’ design or dimensional standards. The law also appropriates funds available for ADU permit fee mitigation, to be made available to ADU-supportive jurisdictions which go beyond compliance with the law to make ADUs easier to build (including jurisdictions not subject to the law’s preemption provisions).

HB24-1304 eliminates parking minimums for multifamily and mixed-use buildings near transit within MPOs (though localities can impose parking minimums up to 1 space per unit for buildings of 20+ units or for buildings with affordable housing, if they issue a fact-based finding showing negative impacts otherwise). This bill was pared down in the Senate and would originally have eliminated parking requirements within MPOs entirely.

HB24-1313 is a TOD and planning obligations bill. The bill:
– Designates certain localities as ‘transit-oriented’ (if they are within MPOs, have a population of 4,000+, and have 75+ acres total either within ¼ mile of a frequent transit route or within ½ mile of a transit station – in effect, 30 or so localities along the Front Range).
– Assigns all transit-oriented communities (TOCs) housing opportunity goals, which are simply 40units x the number of acres within the transit area (except exempt areas: conservation, parks, industrial, federal land, floodplain, cemeteries, unserved by water and sewer or wells, airports, public or railroad right-of-way, and mobile home parks).
– Requires TOCs to zone to accommodate their housing opportunity goals (starting at the end of 2026, and with exemptions for insufficient water resources), and report triennially on their continued compliance with the law. The TOCs have more flexibility to allocate density than was allowed for in last year’s bill, but the ‘transit centers’ towards which they allocate density must allow between 15 and 500 units per acre, and within the transit centers multifamily must be permitted by right on lots greater than 5 acres. The bill also makes clear these requirements apply to PUDs and HOAs within the affected area as well.
– Also requires TOCs to adopt some of a selection of strategies to preserve affordable housing and prevent displacement (one of the possible strategies is inclusionary zoning).
– In its original form, would have conditioned eligibility for grants from the state’s existing Highway Users Tax Fund on compliance; this provision was stripped out in the Senate.
– Creates a $35M TOC infrastructure grant program – so the carrot from the original bill for compliance is preserved, but not the stick.

These join other Colorado housing bills already signed by the governor, including a ban on occupancy restrictions other than for safety (HB24-1007), and bills to require long-range planning and to create a right of first refusal for local governments to buy affordable housing developments. Colorado also made it harder to block home-based businesses in SB24-134. Taken together, the package of bills make Colorado the first state to have a major YIMBY breakthrough in 2024.

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Responsive Cities in the arena: Brazil floods https://marketurbanism.com/2024/05/09/responsive-cities-in-the-arena-brazil-floods/ https://marketurbanism.com/2024/05/09/responsive-cities-in-the-arena-brazil-floods/#respond Thu, 09 May 2024 19:50:50 +0000 http://marketurbanism.com/?p=83637 How do urbanists respond to a disaster? Emails from Brazil's Rodrigo Rocha show innovation and personal resilience in the face of crisis.

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Update: Support the recovery work of Responsive Cities Institute by donating via PayPal.

Last year, Alain Bertaud and I traveled to Porto Alegre and spent time learning from the excellent architects and urbanists at the Responsive Cities Institute – you can think of it as a practitioner-led, intellectual movement that leans into the good parts of Smart Cities while retaining a humble, Bertauvian respect and love for emergent order.

This week, the Responsive Cities Institute has been thrown into the crucible of their city’s greatest disaster. Immediately, they put their talents and principles into action. With their permission, I’ve copied this week’s email chain between architect Rodrigo Rocha and Alain. I’ve edited it for length and to remove any information that seemed personal.


From: Rodrigo Rocha
Sent: Monday, May 6, 2024
To: Alain Bertaud
Subject: Porto Alegre – Brazil’s Worst Climate Crisis

Hello Alain, how are you? I hope you are well.

Unfortunately, I cannot say the same. I don’t know if you have seen it somewhere, but Porto Alegre and the entire state are suffering the worst climate crisis in history. The north of the state experienced heavy rains that accumulated in the rivers that flow into the Guaíba Lake in the capital. Both Porto Alegre and other coastal cities were completely flooded.

The lake level rose to 5.35m (the largest flood Porto Alegre had ever experienced was in 1941, reaching up to 4.7m)…

On the left corner is the public market we visited, located in the city center.

In the state, we have more than 15,000 people in shelters, 80,000 displaced, and 710,000 affected (and counting). Several cities have been completely overtaken by water. Those that weren’t devastated by the floods are suffering from a lack of water supply, fuel, and power. Many roads are blocked due to landslides, and the airport is flooded. It’s complete chaos.

At the Responsive Cities Institute, we are designing a three-step plan to assist the public authorities in organizing.

Step 1: Mapping (Emergency)

  • Objective: Maximize communication to reach as many people as possible, showing data on the severity of the situation; facilitate the operation/management of the public authorities and donations from the private sector to shelters; cross-reference flood areas with households to map houses and owners that were in affected areas and cross-check the names with the list of people taken in at shelters; use our platform to spatially display all the data and create a monitoring dashboard;

Step 2: Shelter (Temporary)

  • Objective: Provide decent lodging for homeless people (who have completely lost their homes), until permanent housing is established; map unused public buildings and quickly adapt them to provide decent housing for people; move people from precarious shelters and relocate them to shelters where they can stay for a period ranging from 3 months to 2 years during the city’s reconstruction;

Step 3: Rebuild (Definitive)

  • Objective: Implement long-term solutions to prevent future floods and reurbanize/rehabilitate affected areas. Create means of financing the reurbanization and creation of new housing.

Your experience would be extremely valuable in developing this plan. We need to think about projects that address the problem of future floods, completely reurbanize affected cities, and design a way to quickly finance this. During your time at the World Bank, did you have any similar experience? Also, do you have any bibliography that you think would be interesting for us to study?

…It would be great to have your opinion and critique on the plan we are drawing up. I look forward to your response,

Best regards, Rodrigo

This is Canoas, a city in the metropolitan region of Porto Alegre

From: Alain Bertaud
Sent: Tuesday, May 7, 2024
To: Rodrigo Rocha
Subject: Re: Porto Alegre – Brazil’s Worst Climate Crisis

I feel terribly sad looking at your pictures and data. Porto Alegre has a special meaning for me because of two visits and the wonderful people I met there..

The rapid mapping exercise that the Responsive Cities Institute is doing is critical.  

Concerning shelter for refugees, I doubt the municipality will find enough empty public housing or formal shelter to house the large urban population that the flood displaced. It will then be obliged to establish refugee camps using temporary shelters made of redesigned containers.

My advice…is to avoid rehousing households who have lost their house in large refugee camps far from inhabited areas—although it is expedient to do so from a relief management point of view. It is better to locate refugees in habitable containers in small settlements very close to urban areas that are still intact.

The advantage of small temporary resettlement camps is that they give refugees easy access to already functioning social services and commerce. Kids can join schools immediately, even if the class size increases slightly. The existing population can also assist refugees in an informal, helpful way, provided the camps are small enough (less than, say, 200 families) to avoid overwhelming the existing settled population. By contrast, the proximity of huge refugee camps quickly generates an adverse reaction from the host population. 

I am afraid that my advice might be irrelevant to your extraordinary catastrophic situation.

I am also concerned about the medium-term impact of the flood on the economy, in particular, the closing of the airport. I have never encountered a situation like that before…

I feel a bit ashamed to provide such superficial advice from the comfort of my hotel room… With my warm regards,

Alain


From: Rodrigo Rocha
Sent: Wednesday, May 8, 2024
To: Alain Bertaud
Subject: Re: Porto Alegre – Brazil’s Worst Climate Crisis

Good morning Alain,

Following the end of this email, I will unfortunately be evacuating the city as per the mayor’s recommendation. It’s been 2 days since I’ve had water in my apartment, as is the case for over 80% of the city. I am not at risk – Porto Alegre still has an unobstructed road to leave the city. I will go to the mountains and stay a few days with family. In the office, we had two colleagues who completely lost their homes, but everyone is safe.

Yesterday’s image of Mathias Velho neighborhood, in Canoas. More than 100,000 people lived in the neighborhood.

Fortunately, our region is receiving many donations, whether of supplies or volunteer time from all over the country. I was really pleased to see the number of civilians getting involved in rescuing people who are still stranded on their roofs.

Thank you very much for your email. I am very pleased to say that we are taking into account practically everything you advised in the email! Our biggest challenge is to communicate with the population and authorities. Our governor is adopting an interesting discourse of “exceptionality” to remove state bureaucracies and increase the speed of public action to resolve the various problems that are arising, which has pros and cons.

Sad image of the runway at Porto Alegre airport

We are working very hard to help in the whole situation. Practically the entire office has stopped to dedicate themselves entirely to solutions within our reach. In three days of work, we managed to carry out four major actions:

  1. Opening an account for resource donations – we have already gathered enough to purchase two generators which we will donate to a clinic and a nursing home that are without electricity (I believe they will be installed by tomorrow);
  2. We publicly launched a campaign to register volunteers from the construction sector who will work on the assessment and reconstruction of residential homes that were damaged. In one day of having the form online, we managed to gather more than 8,000 people including architects, engineers, bricklayers, painters and suppliers!
  3. We mapped over 193 temporary shelters [abrigos]. We have the contact of the person responsible for each of these shelters and volunteers update in real time the needs for mattresses, clothing, food, and medications… There must be more than 350 shelters in the state and our plan is to map them by the end of this week. People in these shelters are expected to stay there for at least another 15 days… On the same platform, we have also started to map the water level and today we should have all the roads that are blocked, since we managed to integrate with the official list from the highway patrol.
  4. We mapped over 1,430 idle government properties [imovels oclosos]. Of these, 350 are buildings in already established urban areas, and the rest are land plots. We will publicly propose a temporary readjustment of these properties until a definitive solution is defined. We will also map properties owned by the federal government and municipalities. I believe we will be able to propose a decent temporary housing solution for all the displaced within the urban area.

However, we are very concerned about the medium to long-term solution…

A friend of mine took this picture of people evacuating the city via the only available road, Avenida Ipiranga.

It would be wonderful if you [could help us with certain professional contacts], and even better if you could be a part of it… The opportunity to develop an even better city than before is very great, but I fear that the solutions some might propose would leave it worse than it used to be…

Wishing you a great seminar!

Rodrigo


From: Alain Bertaud
Sent: Wednesday, May 8, 2024
To: Rodrigo Rocha
Subject: Re: Porto Alegre – Brazil’s Worst Climate Crisis

Thank you for the update on the situation in Porto Alegre. 

Looking at the map you provided, I am amazed by the number of vacant properties belonging to the state, many of them with excellent locations. The contour map reassures me that there are still many areas where people can take shelter. When your team has completed the inventory for Municipal and Federal properties and the capacity of each site for immediate shelter or land to be filled with temporary shelters, you will be able to advise on the best locations to allow the refugees to remain involved in Porto Alegre’s urban life.

Your team is doing all the right things. I do not have anything more to suggest. 

Concerning [professional contacts] ….

Please convey my regards to your team. It must be hard to keep working when so many personal problems caused by the flood affect your own family.

Alain


From: Rodrigo Rocha
Sent: Wednesday, May 8, 2024
To: Alain Bertaud
Subject: Re: Porto Alegre – Brazil’s Worst Climate Crisis

Dear Alain,

We have gained access to all federal public properties. We have filtered those in our state and will make them available on the platform later today. The data for municipal properties is more difficult since there is no standard registration, but our team is trying!

Another interesting data we’ve managed to map are the homes within the flooded area. There are over 400,000 properties with various different uses. All of them are already available on the platform.

Individual residential properties within the flood area

Good to know we are on the right track! I will keep you updated with news as soon as we have it.

Regarding [professional contacts]…

Yes, you can authorize Salim to publish whatever is needed! Best regards,

Rodrigo Rocha

Update: Support the recovery work of Responsive Cities Institute by donating via PayPal.

Video of devastation in Rio Grande do Sul, shared by Rodrigo Rocha

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Is zoning unconstitutional? https://marketurbanism.com/2024/05/07/is-zoning-unconstitutional/ https://marketurbanism.com/2024/05/07/is-zoning-unconstitutional/#respond Tue, 07 May 2024 23:47:49 +0000 http://marketurbanism.com/?p=83613 Two law professors, Joshua Braver of Wisconsin and Ilya Somin of George Mason, are coming out with an article suggesting that exclusionary zoning (by which they mean, rules such as apartment bans and minimum lot sizes that are designed to exclude people less affluent than an area’s current residents) violate the Takings Clause of the […]

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Two law professors, Joshua Braver of Wisconsin and Ilya Somin of George Mason, are coming out with an article suggesting that exclusionary zoning (by which they mean, rules such as apartment bans and minimum lot sizes that are designed to exclude people less affluent than an area’s current residents) violate the Takings Clause of the U.S. Constitution.

Rather than focusing solely on originalist interpretations of the clause and on policy-oriented “living Constitution” theories, the authors rely on both theories. Under a living Constitution view, they argue that zoning unfairly disfavors vulnerable minorities (anyone who cannot afford to live in a place under current zoning), unfairly limit individual autonomy by limiting the right to move to a new neighborhood, and creates an oligarchy of elite homeowners.

From an originalist perspective, the authors argue that the Takings Clause was intended to protect “a right to use [property], not merely a right against physical seizure by the state.” The authors admit that this right is not absolute, but is limited by the police power of the state. However, the authors cite some early treatises suggesting that the police power is limited to truly dangerous activities, as opposed to merely unpopular land uses such as apartments.

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Market Affordable https://marketurbanism.com/2024/04/30/market-affordable/ https://marketurbanism.com/2024/04/30/market-affordable/#respond Tue, 30 Apr 2024 15:37:24 +0000 http://marketurbanism.com/?p=83483 Check out my new post at Metropolitan Abundance Project: How “inclusionary” are market-rate rentals? In metropolitan Baltimore, a family of four making $73,000 in 2024 qualifies for 60% AMI affordable housing, where it would pay $1,825 per month for rent, utilities included. A third of new market-rate three-bedroom units in Baltimore are rented at around that level.Baltimore […]

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Check out my new post at Metropolitan Abundance Project:


How “inclusionary” are market-rate rentals?

In metropolitan Baltimore, a family of four making $73,000 in 2024 qualifies for 60% AMI affordable housing, where it would pay $1,825 per month for rent, utilities included. A third of new market-rate three-bedroom units in Baltimore are rented at around that level.
Baltimore is typical, as it turns out. In most U.S. metro areas, a substantial share of rentals constructed since 2010 were, in 2021 and 2022, affordable at 60% of AMI… You can also check out maps showing rentals affordable at 80% and 120% of AMI.

The ACS data don’t let me distinguish market-rate from subsidized rentals, so these include LIHTC and other subsidized rentals. Those, however, can’t explain away the core result, and the data don’t show the bifurcated market that some people imagine, with a huge gap between market and deed-restricted rents.

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No Solutions, Just Tradeoffs https://marketurbanism.com/2024/04/26/no-solutions-just-tradeoffs/ Fri, 26 Apr 2024 12:29:29 +0000 http://marketurbanism.com/?p=83375 Research shows that the implementation of an eviction moratorium significantly disadvantaged African Americans in the housing search process.

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File under “sad”, not under “surprising”:

We provide evidence of intensified discriminatory behavior by landlords in the rental housing market during the eviction moratoria instituted during the COVID-19 pandemic. Using data collected from an experiment that involved more than 25,000 inquiries of landlords in the 50 largest cities in the United States in the spring and summer of 2020, our analysis shows that the implementation of an eviction moratorium significantly disadvantaged African Americans in the housing search process. A housing search model explains this result, showing that discrimination is worsened when landlords cannot evict tenants for the duration of the eviction moratorium.

Alina ArefevaKay JowersQihui Hu & Christopher Timmins

The paper is “Discrimination During Eviction Moratoria”, released as an NBER working paper this month.

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Ruminating on Sheetz https://marketurbanism.com/2024/04/19/ruminating-on-sheetz/ Fri, 19 Apr 2024 15:33:31 +0000 http://marketurbanism.com/?p=83252 As anticipated by the “radical agreement” among the parties and justices at oral argument, the Supreme Court’s recently released decision in Sheetz v. County of El Dorado put to rest the question of whether legislatively-imposed land use permit conditions are outside the scope of the takings clause.  The unanimous ruling confirms the common-sense proposition that […]

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As anticipated by the “radical agreement” among the parties and justices at oral argument, the Supreme Court’s recently released decision in Sheetz v. County of El Dorado put to rest the question of whether legislatively-imposed land use permit conditions are outside the scope of the takings clause.  The unanimous ruling confirms the common-sense proposition that a state action cannot evade constitutional scrutiny simply because it’s a law of general application rather than an administrative decree, and subjects conditions on building permits – whether monetary or not – to the essential nexus and rough proportionality requirements enshrined in the Nollan and Dolan cases.

George Sheetz at his California home. Pacific Legal Foundation.

The narrow ruling reflects the sound principle that, when dealing with constitutional questions, a court shouldn’t address hypotheticals or other issues not in direct contention among the parties. Nonetheless, the majority felt compelled to state that it would not address “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,” which seems to leave open the possibility that the answer might be “no.” Justice Gorsuch, in his concurrence, was astonished by this statement, wondering how a court which had just endorsed the universal applicability of the takings clause could stumble into another arbitrary distinction with no basis in common sense or constitutional law.

The court’s concern was not a jurisprudential one, but apparently a policy one: in another concurrence, Justices Kavanaugh, Kagan and Jackson note that “[i]mportantly, therefore, today’s decision does not address or prohibit the common government practice of imposing permit conditions, such as impact fees, on new developments . . . .”  The justices’ impression that applying the current Nollan/Dolan formula to impact fees would or even could “prohibit” them is unfounded.  As Emily Hamilton and I wrote in our amicus brief, Florida’s courts have adopted an even stricter test than in Nollan/Dolan, requiring a specific nexus between the government services that impact fees will fund and the needs of new construction, yet impact fees are ubiquitous there. It’s worth underlining: impact fees themselves aren’t the enemy, and Nollan/Dolan doesn’t forbid them.

The absence of mention of the experience of the many state courts which have addressed these same questions going back 30 years is puzzling.  After all, the constitutional question in Sheetz has been pending since at least 1995, when the Supreme Court denied certiorari in Parking Association of Georgia v. City of Atlanta, 264 Ga. 764, 450 S.E.2d 200 (1994), cert. den. 515 U.S. 1116, 115 S.Ct. 2268, 132 L.Ed.2d 273 (1995).  Justice Thomas, dissenting from the denial of certiorari in that case along with Justice O’Connor, noted “confusion in the lower courts” even at that time, just a year after Dolan had been issued.  That the question has been left to fester for so long is unfortunate, particularly where the answer was so straightforward as to command a concise, 9-0 opinion.  Writing at the Inverse Condemnation blog in 2017,  attorney Robert H. Thomas reasonably surmised than certiorari on the same issue had failed that year as well due to uncertain support for a reversal among the justices, but that now seems difficult to reconcile with the unanimous result in Sheetz.

Underlining the court’s lack of familiarity with state experience is the limited list of cases cited to establish a split in authority. Apart from the California case under petition, the majority lists only four cases, from Ohio, Illinois, Alabama and Arizona, omitting many other applicable cases from states including Florida, Nebraska, Oregon, Colorado, Maryland, Arkansas, Minnesota, Kentucky, Tennessee and North Carolina. Even the Parking Association case from 1995 which resulted in a published opinion is nowhere mentioned. The lack of discussion of this context obscures the experience of many of these states with applying the Nollan/Dolan test to permit conditions and makes the decision perhaps appear more consequential and further reaching than it actually is.

Even in those states where Sheetz overrules precedent – California, Arizona, Nebraska, Alabama, Maryland, Georgia, Oregon, Washington and possibly others – the impact of the decision is likely to be modest, at least in the near term. Starting with the California courts, where the housing stakes are highest, lower courts, courts of appeals and state supreme courts will need to revisit prior decisions and determine how to apply Nollan/Dolan to legislative permit conditions. Fortunately, they have a wealth of jurisprudence from other states to consider in their analysis.* If at least one court accepts the majority’s invitation to apply a watered-down version of the test to legislative exactions, yet another split in authority will emerge. 

State courts which do apply the Nollan/Dolan doctrine faithfully will, if Florida is any indication, help unshackle housing production by shifting generalized municipal cost burdens off new construction while still allowing new development to account for any directly related and immediate costs. For California, that result would go a long way to addressing the unjust situation that George Sheetz found himself in years ago, and which adds to the cost and detracts from the production of so much other housing.

*For examples, see Anderson Creek Partners, L.P. v. Cnty. of Harnett, 2022-NCSC-93, 382 N.C. 1, 876 S.E.2d 476, reh’g denied, 878 S.E.2d 145 (N.C. 2022); Home Builders Ass’n of Dayton & the Miami Valley v. Beavercreek, 2000-Ohio-115, 89 Ohio St. 3d 121, 127, 729 N.E.2d 349, 355; Knight v. Metro. Gov’t of Nashville & Davidson Cnty., Tennessee, 67 F.4th 816 (6th Cir. 2023), Kottschade v. City of Rochester, 537 N.W.2d 301, 308 (Minn. Ct. App. 1995); Amoco Oil Co. v. Village of Schaumburg, 277 Ill.App.3d 926, 214 Ill.Dec. 526, 661 N.E.2d 380 (1995), cert. den. 519 U.S. 976, 117 S.Ct. 413, 136 L.Ed.2d 325 (1996); St. Johns Cnty. v. Ne. Fla. Builders Ass’n, Inc., 583 So. 2d 635, 637 (Fla. 1991); William J. (Jack) Jones Ins. Tr. v. City of Fort Smith, Ark., 731 F. Supp. 912, 914 (W.D. Ark. 1990).

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