Florida HBA Wins School Impact Fee Case that has Statewide Significance

The HBA of West Florida recently won final summary judgment in a long-running case challenging the methodology of a new ordinance in Santa Rosa County, Fla., that levied school impact fees of $5,000 on each new home permitted in the county, $4,000 for each mobile home, and $2,750 for each multi-family unit.

The HBA of West Florida and a group of 11 residential builders and developers challenged the impact fees when they went into effect in 2020, winning a temporary injunction.

The main issue was the disregard the county showed to the geographical and socio-economic differences in the county when formulating the fees. Santa Rosa County is large, stretching from the Florida-Alabama border to the Gulf Coast. Home values along the coast are much higher than in the northern part of the county and the population is growing rapidly along the coast.

But the ordinance would have allowed impact fees collected on new homes built in the northern part of the county to be used to fund schools in the southern part, even though residents in the north received no real benefit.

Circuit Court Judge Darlene Dickey cited the county and school board’s failure to establish the state-mandated “rational nexus and proportionately” standards, which restrict the use of new impact fees to the capital facilities needed to address the impact of a new development. She also noted that the methodology used to establish the fee ignored important geographic and demographic details, did not utilize the most recent and localized data, and contained numerous mathematical errors and inconsistencies.

Ken Bell, counsel for HBA of West Florida and the builders, applauded the decision, noting, “Forcing someone struggling to afford a new mobile home in Allentown to pay a $4,000 'user fee' so that others in Navarre or Gulf Breeze may have a new school is clearly not a ‘user fee’ but an unlawful tax. The School Board may need to raise additional revenue to build new schools, but it must do so legally.”

HBA of West Florida Immediate Past President Blaine Flynn of FlynnBuilt, LLC, called the court's decision a victory for home buyers, adding: “This legal challenge is about accountability. Filing a lawsuit is the last thing we wanted to do but we had no other option after the former superintendent of schools didn't listen to us when we expressed our concern that their ordinance was flawed and incorrect.”

David Peaden, the executive director of the HBA of West Florida, noted the potential statewide significance of the ruling. “A county can no longer levy ‘one size fits all’ impact fees,” he said. “They must take into account if a person living in the north end of a county gets a direct benefit from an impact fee being used to buld a school in the south end.”

In addition to declaring the impact fees “invalid and unenforceable,” Judge Dickey ordered the county to pay costs, fees, and "other such relief,” including $495,000 to builders who paid the impact fee before the injunction.

HBA of West Florida was awarded a grant from the NAHB Legal Action Fund at the beginning of the case.