The government cannot charge large development fees from property owners in exchange for building permits, the U.S. Supreme Court ruled last week. 

The ruling was praised by the National Association of REALTORS® (NAR) as a win in the fight to uphold property rights in the face of rising development fees.

The case rose to the high court from a 2016 lawsuit filed by George Sheetz of California. According to his lawsuit, Sheetz was told to pay his county $23,000 for a traffic impact study in order to receive a permit to build an 1,800-square-foot home on his property.

Sheetz’s attorneys said the fees are unconstitutional because they violate the Fifth Amendment, which prohibits the government from taking private property for public use without fair compensation.

Lower courts sided with the county, but the Supreme Court overruled those decisions on Friday. 

NAR and other housing groups backed Sheetz and submitted statements to the justices.

“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,” NAR, the American Property Owners Alliance, the REALTORS® Land Institute and the California Association of REALTORS® wrote to the court.