Guest Column: Teton County’s Workforce Housing Regulations Are Unconstitutional

“Workforce housing” fees — a bad idea that drives up the cost of housing and unconstitutionally places the burden of other people’s housing on individual property owners — may soon run their course in Wyoming. Senate File 40, if it passes, will provide welcome relief to property owners throughout the state by codifying what the Constitution and common sense already dictate: it’s not fair or legal to make property owners pay for the construction of other people’s homes as a condition of being able to build on their own properties.  

A popular saying goes that the best part of living in Jackson Hole is that it is only twenty minutes to Wyoming. But sifting through Teton County’s thousand-plus pages of land use regulations and steep building fees makes one wonder if it’s only twenty minutes to Sacramento. In Teton County, local officials have imposed workforce housing fees that require homeowners and business owners to pay more than $250,000 in some cases to ‘off-set’ their home or business’s supposed ‘impact’ on the availability of affordable housing.  

Teton County’s regulations are based on the theory that when a property owner builds a home or opens a business, they create a need for a certain number of new employees or workers. And according to the census data, the average income of many of these workers isn’t enough to afford a Jackson-area home. Therefore, the theory is that a property owner who builds a house or opens a business hurts workers by creating jobs for people who cannot afford housing at the going rate. 

That’s junk science. The market sets home sale prices and the wages workers can demand, not individual property owners. The United States Constitution requires a close connection between the real impact of a property use and any fees charged as a condition of approving the use. Local governments can’t leverage their permitting authority to turn the approval process into a shakedown on property owners. Otherwise, the Fifth Amendment’s promise that property owners receive just compensation for property taken for public use is violated.  

Until April 2024, however, Teton County's housing fee avoided court scrutiny — because it was adopted by the county board rather than imposed ad-hoc by planning staff. That definitively changed after Sheetz vs. County of Eldorado (2024), in which the Supreme Court effectively closed that loophole for questionable fees like Teton County’s for workforce housing.

Teton County isn’t alone in violating the Constitution. Just ask Jessica Pilling, a Northern California bicycle tour company owner who applied for a permit to build a larger home for her family of five. Among tens of thousands of dollars in other permit fees, the City of Healdsburg demanded that Jessica pay almost $40,000 in “affordable housing fees” just to get her building permit. Jessica found it hard to understand how her new family home could be considered an “impact” on someone else’s ability to afford housing or how it made sense to fix a housing affordability problem by making her home more expensive.

Property owners can’t be forced to surrender money or property to the government to obtain a building permit unless the money or property is necessary to address impacts of the proposed development. That’s why Jessica, with the help of pro-bono lawyers at my firm, Pacific Legal Foundation, filed a complaint and quickly won a full refund of the city’s affordable housing fee. 

Teton County's “workforce” housing fees face the same legal risk, as they impose the same unconstitutional quid pro quo on property owners: Give us your money or give up your right to use your property. But not every citizen should have to go to Court to get local governments to do what the Constitution requires. 

Property owners who stick their necks out in a court challenge to these fees recognize that their objection may beget hostility from regulators in the form of delays, disapproval, and an unwanted trip on the permitting carousel. The County recognizes the strength of its leverage, and that’s perhaps why it has been spending tax-dollar money to send its own lobbyist down to Cheyenne in a hail-mary to save these fees. Senate File 40 would geld Teton County at the outset, stop the imposition of these ridiculous fees, and prevent costly litigation.  

Besides being unconstitutional, the fees are also bad policy. You can’t fix a housing affordability problem by making home construction more expensive. The fees likewise discourage upward mobility because the income-restricted units built with these fees prohibit their owners from taking promotions and raises.  

None of this is to say that government, non-profits, and private philanthropy are not rightly concerned with making the valley more affordable for workers. This is a laudable goal. However, the Fifth Amendment prohibits the government from shifting burdens more properly borne by the public onto only some individuals. As Justice Oliver Wendell Holmes put it over a hundred years ago: “A strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.” 

Austin Waisanen, from Cody, Wyoming, is an attorney at Pacific Legal Foundation, a public interest law firm that defends Americans' liberty against government overreach and abuse.