Washington Street Fees

In 1977, Gary and Linda Cameron bought their home in Richland, Washington. It is a modest house in an older part of town—a 1,200 square foot home built in 1948. The home includes one bedroom, one bathroom, a small kitchen, a small living room, and two much smaller rooms, which Linda uses for her sewing and computer. Before Gary passed away, they’d talked about renovating their house, but the opportunity had not presented itself.

Sadly, in 2012, Gary passed away. A few years later, Linda decided to use some of the proceeds from Gary’s life insurance policy to finally renovate their home. After all, this was the home she shared with Gary during their life together, and Linda likes her neighbors and the neighborhood.

In 2018, Linda hired a design-build company—AJ Construction and Development—for the renovation. AJ worked with Linda on the design and said it would take care of all of the necessary permits. The plan was to replace the existing carport with a garage and add a second bedroom and bathroom. Linda’s renovations were not going to be cheap, but after more than 40 years in her home, she was ready to make them.

In October 2018, AJ submitted the plans along with an application for a building permit to the city. The city building permit and inspection office determined that there were no health or safety concerns with the plans and was prepared to approve the permit. But Richland’s Public Works Department, which also had to approve the building permits, had other ideas.

Richland had a law that tried to hold homeowners’ rights hostage until they paid a ransom to the city. Like most cities, Richland requires a building permit for many, if not most, alterations or repairs to a home. But Richland also demanded that whenever a homeowner seeks a building permit, the homeowner had to agree to “install improvements” to city-owned property as a condition of receiving the permit. The only exception to this rule, the city manager later confirmed, was if the owner is making less than $50,000 in improvements within a two-year period.

Whenever someone wanted to renovate a home in Richland, the city required homeowners to build “sidewalks, curbs and gutters on all sides” of their property adjoining public property and, if the adjoining streets are not “wide enough,” the homeowner also had  to widen the streets “to conform with the width specified by the city engineer” and add “street lights and storm drain system improvement as needed to complete the street in accordance with city standards.”

In Linda’s case, this would have been a huge undertaking. The only public street that adjoins Linda’s property is Fowler Street, which runs along the back of her property. Because Linda lives in an older neighborhood of Richland, Fowler Street lacks all the things Richland required Linda to build.

In order to add a modest bedroom and bathroom to her home, the city law required Linda to pay to widen more than 400 feet of Fowler Street, along with building new curbs, sidewalks, gutters, storm drains, street lights, etc. All of this despite the fact that Linda’s renovations would have no impact on street traffic, and the sidewalks Richland required her to build would not even meet up with other sidewalks. She’d be effectively building sidewalks to nowhere.

The estimated cost of all these mandated improvements? $60,000.

Linda could not afford to renovate her home and the city’s property and faced a terrible choice: Give up her right to renovate her own home of more than 40 years or give in and use the money she would spend on her home renovation to upgrade a city street which her home improvements do not impact in the least.

This sort of extortionate demand is unconstitutional.

About Linda

Linda and Gary moved from Seattle to Richland in the mid-70s so Gary, a boilermaker, could go to work in the nearby Hanford Nuclear Reservation. Linda and Gary first rented a house and loved their neighborhood. Just a few years later, in 1977, one of their neighbors was going to sell and they jumped at the chance to buy their first home. They renovated the interior of their home themselves. Linda worked as a seamstress and set up a sewing room in their home. As avid gardeners, they planted numerous trees and grew and canned their own vegetables. Gary’s sons came to visit them regularly and they spent a lot of time exploring the outdoors of eastern Washington. Linda and Gary lived in their home together for 35 years until Gary passed away in 2012. Linda, now in her 70s, still lives in the home she shared with Gary, and still spends her days sewing and working in her yard. She also works on her computer, editing a newsletter for a local computer group, digitizing photographs, making albums, and facetiming with her family, and hosts a regular movie night for her friends.

Legal Claims

Linda brought this lawsuit to protect her right to renovate her own home, free from unconstitutional government conditions.

In 2013, the Supreme Court determined that “the unconstitutional conditions doctrine . . . vindicates the Constitution’s enumerated rights by preventing the government from coercing people into giving them up.” The legal doctrine imposes limits on the conditions that government may impose on building permits and other licenses.

The U.S. Supreme Court has recognized that land-use and building permit applicants are especially vulnerable to the type of coercion that the unconstitutional conditions doctrine prohibits because the government often has broad discretion to deny permits. The government is therefore limited in its ability to withhold a building permit in exchange for property—such as the portion of Linda’s yard necessary to widen the road—or money—like that necessary to pay for the new sidewalk.  These sorts of monetary conditions are often called “impact fees.”

Any condition imposed by a government must substantially advance the same interest that would furnish a valid ground for the government to deny the permit. For example, if a developer wanted to build a 100-lot subdivision, a city could deny a building permit on the basis of public health because an influx of new homeowners could overburden the city’s sewer system. Accordingly, rather than denying the permit, the city could condition the permit on the developer improving the city’s sewer system. But even then, the conditions required cannot be too onerous. The cost of the condition must also be roughly proportional to the social costs of the applicant’s proposal. These requirements, the Court wrote, “forbid[] the government from engaging in ‘out-and-out . . . extortion.’”

Impact fees are, at least in theory, meant to offset the impact of development.  Thus, “[w]here a building proposal would substantially increase traffic congestion . . . officials might condition permit approval on the owner’s agreement to deed over the land needed to widen a public road.” But regardless of the context, a government may not withhold a permit in order to mitigate an issue that has nothing to do with the planned construction. In short, if there is no impact, a government cannot impose impact fees. In the context of Linda’s case, adding a second bedroom and bathroom to her home will have no impact on the use of Richland’s streets, sidewalks, or streetlights.

Keeping a lid on impact fees is ever more important. The National Association of Home Builders has reported that—while it is difficult to determine how many municipalities impose such fees—a majority of states have authorized municipalities to charge them. The U.S. Government Accountability Office estimates that nearly 40% of counties and 60% of communities with populations greater than 25,000 impose such fees.

And, while most people may think that only “developers” have to pay these fees, Linda’s case proves that belief false. If it could happen to Linda, it can happen to all of us.

Thankfully, Richland owned up to its mistakes. Shortly after Linda filed her lawsuit, Richland agreed to change its law and grant Linda her permit. Richland’s law now requires city officials to consider impacts and burdens when issuing permits, rather than just foisting fees regardless of impact. Linda’s new permit did not require any renovations to city property, and she broke ground on her home renovations in January 2020, three months after she sued.

The Litigation Team

The case is being litigated by IJ attorneys Paul Avelar, Patrick Jaicomo, and Wesley Hottot.

About the Institute for Justice

The Institute for Justice is the national law firm for liberty and the nation’s premier defender of property rights. IJ defends the rights of homeowners against the government, as it did in Kelo v. City of New London and as it continues to do by fighting eminent domain abuse and the imposition of fines and fees by governments across the country as in its case against the City of Dunedin. And IJ defends property owners against government attempts to coerce them into giving up their rights through unconstitutional conditions on permits or threats of convictions, as it has done in its pathbreaking class action challenge to New York’s no-fault eviction policy.