Making it easy to be green: Using impact fees to encourage green building

New York University Law Review

Volumn 83, Issue 2, 2008, Pages 532-567

  Kingsley, Benjamin S ^a  

^a NEW YORK UNIVERSITY   (United States)

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EID: 45949103937     PISSN: 00287881     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (171)

1. Bldg. Design & Constr., White Paper on Sustainability: A Report on the Green Building Movement, BLDG. DESIGN & CONSTR. 4 (2003) (SUPPLEMENT), available at https://www.usgbc.org/Docs/Resources/BDCWhitePaperR2.pdf [hereinafter White Paper] (quoting Office of Federal Environmental Executive);
2. see also Charles J. Kibert, Green Buildings: An Overview of Progress, 19 J. LAND USE & ENVTL. L. 491, 491-92 (2004) (describing green buildings as "facilities designed, built, operated, renovated, and disposed of . . . for the purpose of promoting occupant health and resource efficiency plus minimizing the impacts of the built environment on the natural environment").
3. See Kibert, supra note 1, at 494-95 (discussing ethical, economic, and health advantages of green buildings compared to conventional buildings).
4. See Nancy J. King & Brian J. King, Creating Incentives for Sustainable Buildings: A Comparative Law Approach Featuring the United States and the European Union, 23 VA. ENVTL. L.J. 397, 405 (2005) (describing nonstandard characteristics of green buildings).
5. Id. at 406; U.S. Green Bldg. Council, About USGBC, http://www.usgbc.org/DisplayPage.aspx?CategoryID=1 (last visited Nov. 10, 2007).
6. U.S. Green Bldg. Council, LEED Rating Systems, http://www.usgbc.org/ DisplayPage.aspx?CMSPageID=222 (last visited Feb. 26, 2008).
7. White Paper, supra note 1, at 7. No other certification system in the United States approaches the popularity of LEED, though some states, such as New York and Pennsylvania, have established their own high-performance building standards. Notably, the New York standards draw heavily on LEED. GREG KATS, CAPITAL E, THE COSTS AND FINANCIAL BENEFITS OF GREEN BUILDINGS 2-4 (2003), available at https://www.usgbc.org/Docs/Resources/ CA_report_GBbenefits.pdf.
8. See U.S. GREEN BLDG. COUNCIL, LEED FOR NEW CONSTRUCTION & MAJOR RENOVATIONS 7 (version 2.2, 2005), available at http://www.usgbc.org/ShowFile.aspx?DocumentID=1095 [hereinafter LEED-NC] (noting point totals required to reach "Certified," "Silver," "Gold," or "Platinum" status).
9. Auden Schendler & Randy Udall, LEED Is Broken; Let's Fix It, GRIST, Oct. 26, 2005, http://www.grist.org/comments/soapbox/2005/10/26/ leed/index1.html. LEED has numerous critics, and the extensive bureaucratic certification process is a favorite target of those who argue that LEED needs a severe overhaul. Id. Nevertheless, LEED remains the national leader in green building standards.
10. LEED-NC, supra note 7, at 7.
11. As such, a building can achieve a high level of certification without receiving any points in crucial areas such as energy efficiency. See White Paper, supra note 1, at 10 (showing that average percentage of energy points achieved by LEED-certified buildings out of total points available is lower than for any other point category); Schendler & Udall, supra note 8 (describing how "you can certify a building without doing much at all" and "you can 'certify a building without getting any energy points' " (quoting LEED consultants)). For this reason, LEED has been criticized for allowing developers to grab "low-hanging fruit"; in other words, developers can target the points for which qualification is easy and reach the stratosphere of LEED certification without achieving anything extraordinary. Id. at 10-11. This critique will be relevant when analyzing the constitutionality of policies that use energy-based impact fees to subsidize buildings that achieve LEED certification without improving energy efficiency. See infra Part III.B.
12. LEED-NC, supra note 7, at 6-7.
13. U.S. GREEN BLDG. COUNCIL, RATING SYSTEM FOR PILOT DEMONSTRATION OF LEED FOR HOMES PROGRAM 21-22 (version 1.72, 2005), available at http://www.usgbc.org/ShowFile.aspx?DocumentID=855. The additional categories are (1) location and linkages, which gives points for sprawl-reducing dense development that is located near already-existing infrastructure and not on virgin land, and (2) homeowner awareness of LEED. Id. at 21-29. The points available in the categories common to LEED New Construction differ slightly, but generally involve similar improvements. Id. at 21-22; LEED-NC, supra note 7, at 6-7.
14. LEED-NC, supra note 7, at 6-7.
15. Id. at 11-12, 16, 19, 21.
16. Id. at 25-26, 28.
17. Id. at 33, 36, 42.
18. Id. at 47, 59, 53, 56.
19. Id. at 61, 65-72, 75.
20. See King & King, supra note 3, at 397 ("Sustainable commercial buildings use less energy, have reduced environmental impacts, and improve the quality of life for those who work or live in the buildings and surrounding communities.").
21. Carl J. Dahlman, The Problem of Externality, 22 J.L. & ECON. 141, 141 (1979).
22. The question of whether the social benefits provided by green buildings are positive externalities or reductions in negative externalities is simply a matter of defining the base-line for the appropriate use of environmental resources generally. Green buildings do both under any reasonable baseline. See infra note 74 (describing how many positive externalities created by green buildings can be seen as reductions in negative externalities). Because green buildings both provide positive externalities and reduce negative externalities, this Note, for convenience, uses the term "social benefits" to describe all of the desirable externality effects created by green building.
23. See KATS, supra note 6, at 9-10 (offering comprehensive evaluation and attempting to quantify financial costs and benefits of building green, including those relevant to private users and owners); ROYAL INST. OF CHARTERED SURVEYORS, GREEN VALUE: GREEN BUILDINGS, GROWING ASSETS 3 (2005), available at http://www.rics.org/Practiceareas/Builtenvironment/Sustainableconstruction/ Green%20value.html (follow "Green Value Report" hyperlink) (claiming that green buildings can improve asset value for owners and users, in addition to providing healthier work environments).
24. See KATS, supra note 6, at vi ("While there seems to be consensus on the environmental and social benefits of green building, there is a consistent concern . . . over the lack of accurate and thorough financial and economic information."); ROYAL INST. OF CHARTERED SURVEYORS, supra note 22, at 3 (stating that various studies "generally do not show whether the increased cost [of building green] is offset by improvements in value").
25. KATS, supra note 6, at v, vii. "Heat island effect" describes the increased temperature of urban environments when compared to their surrounding areas. Environmental Protection Agency, Heat Island Effect, http://www.epa.gov/hiri/ (last visited Mar. 25, 2008). Health benefits are the only area which lacks significant supporting evidence. See infra note 42.
26. Generally, negative externalities in this context result from a traditional "tragedy of the commons" problem in which people who use environmental resources - such as clean air - are not required to pay for these resources. See Garrett Hardin, The Tragedy of the Commons, 162 SCIENCE 1243, 1244-45 (1968) (explaining "tragedy of the commons" problem in context of pollution). Pollution is the classic externality of this sort, as it directly results in social costs not incurred by polluters. However, the application of the idea of externalities to some of the other phenomena described here is more complicated. For example, reduced water use is an externality because the private price of water and sewage services rarely reflects the total social cost of providing these services. Both are subsidized in a number of ways by government, and their overuse creates externalities felt by future generations.
27. See, e.g., Bruce Lambert, As Aquifer Runs Dry, L.I. Water Debate Ensues, N.Y. TIMES, Dec. 2, 2006, at B1 (describing debate over use of underground Long Island aquifers as water supplies in currently used aquifers dwindle). Similarly, solid waste disposal is often subsidized by local governments, and the cost of waste removal rarely accounts for the environmental effects of landfills. Although health benefits to residents or users of green buildings could be internalized in certain situations - for example, owners or residents of green buildings may be willing to pay more for a healthier work or home environment - the market will likely undervalue these benefits as they are difficult to measure and may not be realized immediately.
28. See, e.g., KATS, supra note 6, at ix (arguing that green buildings save money over time compared to conventional buildings); LISA FAY MATTHIESSEN & PETER MORRIS, COSTING GREEN: A COMPREHENSIVE COST DATABASE & BUDGETING METHODOLOGY 3 (2004), available at http://www.usgbc.org/Docs/Resources/ Cost_of_Green_Full.pdf (attempting to establish budgetary guidelines for green building).
29. It is difficult to establish a good baseline value for the cost of nongreen buildings for the purpose of comparison. There are two main reasons for this difficulty. First, accurate cost information is hard to find. It is extremely expensive for developers to make hypothetical inquiries by studying how much it will cost to design and construct a building that will never be built. Governments have no need to do this comparison because they are either required by law to build green or they are not (and thus have little reason to consider the practice). When legislatures pass laws mandating green public buildings, they are passing laws that all government buildings of a certain type must achieve a certain level of greenness, so they do not do a rigorous cost-benefit analysis for any one building. Though such legislatures theoretically could consider overall total fiscal costs of these mandates, they do not necessarily pass these laws because they expect to save money. They do so instead for the externality reasons, which are generalized but sufficient to convince environmentally conscious local legislatures. Furthermore, private green buildings are scarce, and corporations are often unwilling to provide sensitive cost information to researchers. Second, many builders estimate the added marginal cost of specific LEED components that will help them reach a specific certification level instead of determining the cost of a holistically designed green building. This practice results in higher cost estimates, as designing green from the outset for an entire building is by far the least expensive way to incorporate a large number of green features. See Schendler & Udall, supra note 8 (describing "point mongering" as "obsessively focus[ing] on getting [LEED] credits" instead of holistically designing greenest building possible).
30. KATS, supra note 6, at 15. The Kats report compares only self-reported estimates of cost, which may lead to some bias. The report has a number of critics, but none have successfully undermined its general claim that green buildings are not much more expensive than standard buildings. See, e.g., Schendler & Udall, supra note 8 ("Instead of using fuzzy math to show that building green doesn't add costs, let's acknowledge that these buildings cost more and are worth it.").
31. MATTHIESSEN & MORRIS, supra note 26, at 14.
32. Id. at 18-19.
33. Id. at 16.
34. Schendler & Udall, supra note 8.
35. See id. (describing new green building projects as akin to entering "a thorny new landscape"). Schendler and Udall also blame LEED's bureaucratic certification process for some of these costs. Id. The LEED bureaucracy, however, is not inherent to the green building process itself.
36. See infra notes 54-67 and accompanying text for a discussion of risk aversion in the real estate industry.
37. See PRESIDENT'S COMM. ON URBAN HOUS., A DECENT HOME 117 (1962) (describing "fragmentation" of housing industry into various "interlocking producing units").
38. See SHERMAN J. MAISEL, FINANCING REAL ESTATE 346 (1965) (describing significant reliance on outside credit in real estate industry);
39. SHERMAN J. MAISEL & STEPHEN E. ROULAC, REAL ESTATE INVESTMENT AND FINANCE 383 (1976) (discussing importance of relationship between cash flow and debt service).
40. See Schendler & Udall, supra note 8 (arguing that LEED buildings cost more partially because they require use of tools with which designers are inexperienced).
41. KATS, supra note 6, at 23-24.
42. Id. at 24. Assuming an average electricity price of $0.11/kWh and an average annual discount rate of capital of five percent - both figures used by Kats throughout his study - a thirty-percent reduction in energy use saves $5.48 per square foot of space over a twenty-year period; the reduction of another ten percent in peak energy use saves an additional $0.31 per square foot. Id. at 27.
43. Id. at 40. Kats estimates the cost savings for water at $0.51 per square foot over twenty years. Id. at 46.
44. Id. at 75. Under-floor air systems are generally designed to allow space flexibility, improved ventilation, and quieter working conditions. Id. at 73. Churn-cost reductions result in a twenty-year savings of about $4.98 per square foot. Id. at 77.
45. Id. at 54-70. If accurately described, these health and productivity savings dwarf all others, at $36.89 per square foot over twenty years for LEED Certified or Silver buildings and $55.33 per square foot for Gold and Platinum buildings. Id. at 68. Predictions about these savings, however, are no more than rough estimates extrapolated from studies that show independent gains in each of these impact areas. Id. at 67. Still, there are likely to be significant productivity gains for workers in green buildings, even if the evidence is too soft at this point to expect employers to demand green office buildings en masse on this basis alone.
46. Id. at 85. Kats estimates that green buildings save ten times as much money as they cost. Id. The Kats report accounts for some public benefits that result from green buildings - such as reduced water use - but the vast majority of the benefits described are private. See id. at 84 (discussing discrepancies between public and private benefits). The productivity benefits cited by Kats are not as well documented as the other benefits. Id. at 85. Despite these weaknesses, however, energy and maintenance savings alone account for twenty-seven percent of the estimated benefits and are enough to far outstrip the added cost of building green. Id. At the very least, the report demonstrates that green buildings are indeed financially beneficial for private owners.
47. See Schendler & Udall, supra note 8 (stating that advocates should acknowledge that green buildings "cost more and are worth it").
48. Cf. KATS, supra note 6, at 12 (citing "incomplete integration within and between projects" as major cause of higher costs in green building). The net financial effects of green building depend on the discount rate of capital - the rate at which future income produced by an asset should be discounted when valuing it in the present. To the extent that a green building does cost more, it costs more up front, while it only saves money over time. Id. at 9-10. Yet even with high discount rates, most green buildings pay off quickly. See id. at ix (concluding that over twenty years, green buildings save over ten times more than they cost).
49. The research described above mostly focuses on government and university buildings, which are generally built by and for their future owners. See id. at 98 (listing buildings considered by Kats report).
50. White Paper, supra note 1, at 12. Overall, as of 2003, 10% of LEED projects were federal government projects, 13% state government, 25% local government, 14% non-profit corporations, and 5% "other." Id. The added cost of LEED certification itself may be a disincentive that prevents private sector developers from registering their buildings. Thus, this figure may be artificially low; there may be many unregistered green buildings whose users reap operational benefits without having gone through the LEED certification process.
51. BENJAMIN CRYER ET AL., EVALUATING THE DIFFUSION OF GREEN BUILDING PRACTICES 18-19 (2006), available at http://personal.anderson.ucla.edu/charles.corbett/ papers/diffusion_green_building.pdf; see also supra notes 28-32 and accompanying text (estimating costs of new green building projects to be zero to ten percent more than conventional buildings).
52. CRYER ET AL., supra note 48, at 17.
53. Id. at 19.
54. ORG. FOR ECON. CO-OPERATION & DEV., ENVIRONMENTALLY SUSTAINABLE BUILDINGS: CHALLENGES AND POLICIES 60-61 (2003) [hereinafter OECD REPORT] (discussing "[m]andatory standards" as method of achieving green building goals). Many local governments set minimum baselines for energy and water efficiency through building codes.
55. See David Listokin & David B. Hattis, Building Codes and Housing, CITYSCAPE, 2005, No. 1, at 21, 23 (describing basic purposes of building codes, including energy and plumbing codes). Boulder, Colorado is a prime example of a city that aggressively requires high-performance building across the board, through guidelines that operate similarly to the LEED standards.
56. See BOULDER, COLO., REV. CODE § 10-5.5-2(y)(2) (1981), available at http://www.colocode.com/ boulder2/chapter10-5-5.htm (requiring "[r]esidential building permit applicants . . . to earn Green Points according to . . . schedule"). The city council of Washington, D.C., recently approved an ordinance requiring that every new private commercial development with more than 50,000 square feet of space be LEED certified by 2012.
57. Nikita Stewart, D.C. Moves To Become Pioneer in Forcing 'Green' Construction, WASH. POST, Nov. 16, 2006, at A1.
58. See OECD REPORT, supra note 51, at 60 (listing possible economic incentives for green building). One example of an information-providing label is ENERGY STAR, a federal labeling program for appliances and building materials. See ENERGY STAR, About ENERGY STAR, http://www.energystar.gov/index.cfm?c=about.ab_index (last visited Feb. 28, 2008) (describing ENERGY STAR program).
59. It makes sense to consider the policy options in this order because if less burdensome (and thus most politically attractive) options are effective, the policy analysis should end with those options.
60. This Section relies heavily on research that takes the position that the real estate industry is notably slow to adopt new technology. See LOREN LUTZENHISER ET AL., MARKET STRUCTURE AND ENERGY EFFICIENCY: THE CASE OF NEW COMMERCIAL BUILDINGS 23 (2001) (emphasizing "conservative and 'anti-innovation' tendencies" of real estate industry). Lutzenhiser et al. use in-depth qualitative interview methods, backed by sociological literature on organizational structure and behavior, to test their claims about the conservative nature of the real estate market. Id. at 5-7. Most of their arguments are supported by industry insiders. See, e.g., id. at 25-26 (quoting "property developer" at length).
61. See id. at ix (explaining that industry favors "models that have worked well in the past" over "new ideas").
62. See infra notes 69-71 and accompanying text.
63. The real estate industry described here includes the developers and the banks that provide financing for the development process. Typically, "[t]he developer is at the center of the building process." LUTZENHISER ET AL., supra note 54, at 11. Developers task architects and engineers with designing buildings that provide the highest possible revenue at the lowest possible cost. Id. at 12. Lenders have an important amount of influence in the process because most real estate development projects are extremely dependent on debt financing. Id. at 28.
64. See, e.g., CITY OF SEATTLE SUSTAINABLE BLDG. PROGRAM, 5-YEAR REPORT: BUILDING A BETTER CITY 13 (2005), available at http://www.cityofseattle.net/dpd/stellent/groups/pan/@pan/@sustainableblding/ documents/web_informational/dpds_007594.pdf [hereinafter SEATTLE REPORT] (describing city's "Built Green" marketing plan and tool kit - designed to help developers "sell the benefits of green building" - and Green Building Communications Campaign, which is designed to "increase awareness" of green building and to "support the City's economic development strategy").
65. Cf. CRYER ET AL., supra note 48, at 17-19 (suggesting that developers' and contractors' mistaken perceptions of costs of green building pose major obstacles to increased green development).
66. See Schendler & Udall, supra note 8 ("The myth that going green costs nothing is damaging to clients who discover the reality deep in the process.").
67. See LUTZENHISER ET AL., supra note 54, at 23-24 (discussing industry's "'anti-innovation' tendencies" and aversion to unfamiliar practices).
68. Id. at 30. Lenders and developers are "very reluctant to invest in projects that do not fall inside the lines of what has been 'profit generating' before, seeing new, untested, and novel additions as adding uncertainty, rather than value, to a proposed development." Id.
69. Id. at 32 (ellipsis in original) (quoting "property developer").
70. Id. at 36. Lutzenhiser et al. describe this phenomenon in greater detail: For example, banks give better rates to those they have successfully worked with in the past. Developers tend to use the same banks and contract specialists for the same reasons (lower rates and already existent working relationships). And designers, contractors, and subcontractors, while called into projects based on their expertise, are often referred and then chosen based on the social ties they share and the accompanying "trustworthiness" that this brings. One of the important roles that social ties play is that they reduce uncertainties, in a risk-averse industry, by providing interpersonal and inter-and intra-firm interactions with predictability and stability. Id.
71. See id. at 30-31 (describing how decisions to grant initial financing are highly dependent upon developer showing past success with building type).
72. Id. at 33. Real estate development tends to attract risk-averse investors because it is thought to provide steady and predictable income. Id. at 32.
73. See supra notes 33-37 and accompanying text for a discussion of the costs of delays as well as other soft costs of building green.
74. See King & King, supra note 3, at 397 (discussing incentive programs used by some states).
75. Subsidies for individual projects come in two distinct forms. (1) A number of states - such as Oregon, Maryland, Massachusetts, and New York - have enacted tax credit programs for green buildings as a whole. ELIZABETH BROWN ET AL., AM. COUNCIL FOR AN ENERGY- EFFICIENT ECON., TAX CREDITS FOR ENERGY EFFICIENCY AND GREEN BUILDINGS: OPPORTUNITIES FOR STATE ACTION 14 (2002), available at http://www.aceee.org/pubs/e021full.pdf. All of these programs involve caps on the total amount of credits available and/or the maximum size of any individual credit. Id. at 18. Some states - Idaho, Hawaii, Arizona, and New Jersey - have made tax credits available for environmentally friendly activities such as cogeneration or weatherizing, but they have not chosen to subsidize green buildings as a whole; of course, these less ambitious programs also have caps. Id. at 9-11, 29.
76. Many cities and states provide direct grants for green building. King & King, supra note 3, at 423 ("Although none exist at the federal level, many state and local governments offer [direct grant] subsidies for sustainable construction."); see also Database of State Incentives for Renewables & Efficiency, http://www.dsireusa.org (last visited Feb. 27, 2008) (listing state, local, and federal incentive programs for energy-efficient development). Seattle, Washington, and Portland, Oregon, have led the way in providing direct subsidies (and also lead the way among cities nationally in LEED-registered projects). See King & King, supra note 3, at 423-24. Yet, the programs in both of these cities remain limited. See King & King, supra note 3, at 423-25 (describing Seattle subsidy program, which has per-project caps);
77. City of Portland, Green Investment Fund, http://www.portlandonline.com/ osd/index.cfm?c=42134 (last visited Feb. 27, 2008) (describing Portland subsidy program, which has overall and per-project caps).
78. See King & King, supra note 3, at 424 (explaining that Seattle's subsidy program is limited to money spent on "soft" costs of obtaining LEED certification); City of Portland, supra note 69 ("The primary intent of [Portland's green building subsidy] is to support early building and site-related project activities that examine the potential and identify the means to realize an exemplary, comprehensive green building project. [Green Investment Fund] grants are secondarily intended to help offset the incremental hard costs of the green building . . . .").
79. See OECD REPORT, supra note 51, at 66 ("[I]ntroducing subsidy programmes inevitably requires tax revenues, and in a time of fiscal constraints on public spending this raises questions about the feasibility of subsidies that would have to be sizeable enough to have the desired effect.").
80. Id. Although the "free rider" problem usually refers to those who take advantage of socially beneficial goods without sharing in their costs, the concept is equally applicable to those who take advantage of a subsidy program without actually changing their behavior.
81. Id. at 67.
82. Policy "sticks" designed to encourage green building might be criticized on the grounds that, as green buildings provide positive externalities to society, government should reward the use of green buildings rather than punish those who do not build green. But many of the benefits of green buildings come in the form of reductions in negative externalities; for example, green buildings reduce pollution, which is a classic negative externality. See Hardin, supra note 25, at 1245 (conceptualizing pollution as "a reverse . . . tragedy of the commons"). More importantly, defining a benefit as a positive externality as opposed to a reduction of a negative externality is more a matter of baseline property rights than a question of policy. See R. H. Coase, The Problem of Social Cost, 3 J.L. & ECON. 1, 2 (1960) (arguing that externalities are "reciprocal" in nature and that they are created by rival uses of resources by multiple parties). Like Coase, I hope to resolve externalities in the most efficient way possible.
83. For example, Boulder, Colorado, has implemented a green building requirement through the city building code. BOULDER, COLO., REV. CODE § 10-5.5-2(y) (1981), available at http://www.colocode.com/boulder2/chapter10-5-5.htm.
84. See OECD REPORT, supra note 51, at 61 ("A regulatory approach to the design of buildings can be seen as the most dependable way to achieve a given goal of energy efficiency; and the effectiveness of regulatory instruments is hardly affected by market barriers.").
85. See, e.g., Listokin & Hattis, supra note 51, at 21-22 (discussing literature on negative impact of building codes on housing production and affordability).
86. Cf. Bruce A. Ackerman & Richard B. Stewart, Reforming Environmental Law, 37 STAN. L. REV. 1333, 1334-37 (1985) (criticizing Best Available Technology Standards under Clean Air Act and Clean Water Act for imposing unnecessary costs on industry and for impeding innovation).
87. See OECD REPORT, supra note 51, at 61 (suggesting that standards are difficult to change because of stakeholders' opposition and abundance of administrative red tape). A government could solve this problem by delegating responsibility for standard setting to LEED or another independent certifying authority, but governments may be uncomfortable giving away their authority.
88. See David W. Chen, Partisans Sound Off at Hearing on Competing Building Codes, N.Y. TIMES, Dec. 1, 2004, at B2 (describing vitriolic hearing on New York City building code revision proposals).
89. See infra notes 83-91 and accompanying text (discussing Pigouvian taxes and fees).
90. This Note does not consider marketable permit schemes. Under such schemes, governments impose caps on the total amount of impacts they will allow in certain impact areas. WILLIAM J. BAUMOL & WALLACE E. OATES, THE THEORY OF ENVIRONMENTAL POLICY 177 (2d ed. Cambridge Univ. Press 1988) (1975). Developers can then sell impact permits to one another in an open market. Id. In the context of green building, the market for such permits is unlikely to be sufficiently robust to make the program work, as it is unlikely that there would be a sufficient number of buildings, within a single jurisdiction, at similar stages of development, to make significant permit trading feasible.
91. See A.C. PIGOU, THE ECONOMICS OF WELFARE 192 (4th ed. 1932) (describing divergence in private and social costs as externality and suggesting tax as "[t]he most obvious" way for states to "remove the divergence").
92. See Mireille Chiroleu-Assouline & Mouez Fodha, Double Dividend Hypothesis, Golden Rule and Welfare Distribution, 51 J. ENVTL. ECON. & MGMT. 323, 323 (2006) ("One of the advantages of the environmental tax is that it provides public revenue which can be recycled. This is the reason why it is often preferred to subsidies or emission quotas."). Although there is substantial debate in the literature on the size of this effect, under the right conditions, this effect does occur. See id. at 323-24 (discussing debate in literature on "double dividend" effect of reducing externalities and increasing revenue without deadweight loss, and showing that such effect can occur).
93. DAVID C. COLANDER, MICROECONOMICS 160 & fig.7-3 (5th ed. 2004).
94. Id.
95. See PIGOU, supra note 83, at 134-35 (explaining that Pigouvian taxes must account for typically "uncompensated" externalities, and thus, that they cover social costs of targeted activities). Indeed, this is a major goal of a Pigouvian tax - to reduce output to an efficient level.
96. Cf. Chiroleu-Assouline & Fodha, supra note 84, at 323 (describing environmental taxes as preferable to subsidies because they remove distortion).
97. See supra note 87 and accompanying text. Moreover, given the financial savings produced by green buildings in the long run, any up-front costs can actually be recollected by the buildings themselves.
98. Requirements will discourage efficient construction by developers for whom the perceived increased costs of building green are greater than the profits the developer can make from the building, which in turn are greater than the social benefits of building green - in other words, buildings that are efficient even once externalities are considered but that will be too costly to be built green. With a Pigouvian tax or fee set at the appropriate level, such developers will pay their taxes or fees and build these socially beneficial nongreen buildings. With a requirement, however, these developers will not undertake these projects, even though benefits - in the form of the developer's profits - would be greater than total social costs (including building costs and externalities). Because the cost of building green will vary from developer to developer, it is impossible to set a requirement at a level that consistently ensures that all efficient buildings will be built.
99. See OECD REPORT, supra note 51, at 73 ("Energy taxes . . . provide continuous incentives to seek more cost-effective technologies.").
100. See id. at 72-73 (discussing ability of energy taxes to increase demand for environmentally friendly products and buildings).
101. See supra notes 54-67 and accompanying text.
102. See OECD REPORT, supra note 51, at 73-74 ("[I]nvestors tend to be [overly] concerned with initial costs relative to operating costs.").
103. Vicki Been, Impact Fees and Housing Affordability, CITYSCAPE, 2005, No. 1, at 139, 140. Local governments may create extremely restrictive land use regimes in order to force landowners and developers to provide public benefits.
104. See Jerold S. Kayden, Zoning for Dollars: New Rules for an Old Game? Comments on the Municipal Art Society and Nollan Cases, 39 WASH. U. J. URB. & CONTEMP. L. 3, 5-8 (1991) (describing and defending trend of municipalities using incentive zoning to fund various community needs and amenities).
105. Been, supra note 95, at 140.
106. Id.
107. See Id. at 141 n.1 (discussing rising popularity of impact fees and similar mechanisms worldwide).
108. Id. at 140-41.
109. ALAN A. ALTSHULER ET AL., REGULATION FOR REVENUE: THE POLITICAL ECONOMY OF LAND USE EXACTIONS 49, 51 (1993).
110. Id. at 49. Exceptions to this rule include some "home rule" states, where state legislatures have delegated more general powers
111. Id. at 49.
112. See, e.g., Bloom v. City of Fort Collins, 784 P.2d 304, 308-09 (Colo. 1989) (finding that transportation fee imposed for "the purpose of defraying the cost of a particular governmental service" was legitimate and not property tax); Lafferty v. Payson City, 642 P.2d 376,378 (Utah 1982) (finding impact fee that was "reasonable charge for a specific service" to be permissible and not illegal tax); Contractors & Builders Ass'n v. City of Dunedin, 329 So. 2d 314, 318 (Fla. 1976) (finding sewer and water connection fees imposed on development to be regulatory impact fees, not unauthorized taxes). The inquiries in the case law cited above follow the general legal distinction between impact fees and taxes: "A tax can be used for any purpose; no connection, in principle, need exist between the source of revenue and the purposes for which it is used." ALTSHULER ET AL., supra note 100, at 51. The purpose of impact fees, on the other hand, "must be to finance service capacity for future occupants or to alleviate negative project impacts on the wider community." Id.
113. Seattle and Portland have featured prominently in this Note's discussion of existing green building programs. Many other cities, however - including those with considerably less environmentally friendly reputations - have promoted green building aggressively. Prominent examples include Las Vegas and Phoenix, two of the fastest growing urban areas in the country and two areas hardly known for their progressive politics. See CITY OF PHOENIX, PHOENIX ENVIRONMENTAL S USTAINABILITY PROGRAM SUMMARY: ENERGY AND GREEN BUILDINGS 1-2 (2007), available at http://phoenix.gov/sustainability/energy.pdf (describing green building programs in Phoenix);
114. Las Vegas Models Its Green Program on NAHB Guidelines, NATION'S BUILDING NEWS, Oct. 23, 2006, http://www.nbnnews.com/NBN/issues/2006-10-23/Green+Building/index.html (describing Las Vegas's Southern Nevada Green Building Partnership, designed to certify and provide incentives for developers who build green);
115. see also CITY OF LAS VEGAS PLANNING & DEV. DEP'T, GREEN BUILDING PROGRAM 1-4 (2006), available at http://www.lasvegasnevada.gov/files/Green_Building_Program_Brochure.pdf (describing Las Vegas green building ordinance);
116. Lance Kirk, The Value of Green, LAS VEGAS BUS. PRESS, NOV. 14, 2005, at 20, available at http://www.lvbusinesspress.com/articles/2005/11/15/news/news09.txt (discussing plans to achieve LEED certification for massive CityCenter Project on Las Vegas Strip).
117. See Al Baker, Albany Passes Budget on Time; A First Since '84, N.Y. TIMES, Apr. 1, 2005, at A1 (describing hope that timely budget passage by New York State legislature would end "two decades of governmental dysfunction that had paralyzed local governments year after year and had made state legislators a national laughingstock");
118. Danny Hakim & Jennifer Medina, The 229th Legislative Session: A Blend of Accomplishment and Dysfunction, N.Y. TIMES, July 16, 2006, at 26 ("If the 229th session of the New York State Legislature did little to dispel the notion that Albany is the nation's capital of governmental dysfunction, at least New Jersey's brief shutdown gave Empire State legislators some competition this year.").
119. CAL. CONST. art. XIII, § 1(a).
120. See Lisa Stiffler & Neil Modie, After 1-747: Less Cake, with No Icing, SEATTLE POST-INTELLIGENCER, NOV. 8, 2001, at A1 (describing effects of Washington's Initiative 747, which capped property taxes statewide).
121. See Ron Scherer, In Emissions Battle, U.S. Cities Vie To Be 'Greenest'; More than 300 Mayors Pledge To Reduce Greenhouse Gases, CHRISTIAN SCI. MONITOR (Boston), Oct. 25, 2006, at 1 (describing race among nation's cities "to lead the nation in reducing greenhouse gases"). The mayors of Chicago and New York have each expressed publicly the goal of making their respective cities the greenest in the country. Id. In many cities, the race to be green has been supported by glossy advertising materials.
122. See, e.g., DAVID HSU, DESIGN TRUST FOR PUBLIC SPACE, SUSTAINABLE NEW YORK CITY 8, 10, 15 (2006), available at http://www.nyc.gov/html/oec/downloads/pdf/sustainable_nyc_final.pdf (describing sustainability practices in New York City and arguing that New York "is positioned to take a leadership role among cities in pursuing sustainability");
123. SEATTLE REPORT, supra note 58, at 3 (touting Seattle's green building program and advertising that "Seattle now ranks number one in the nation for LEED projects and professional expertise");
124. New Green Building Policy Strengthens Portland's Commitment to Sustainable Development, GREEN CITY (Office of Sustainable Dev., Portland, Or.), June 2005 http://www.portlandonline.com/shared/cfm/image. cfm?id=112547 (quoting Portland Green Building Manager, Rob Bennett, as stating that Portland "now ha[s] the most LEED-registered projects in the country" and arguing that new green building policy "will ensure Portland continues to pace the country as a green building leader").
125. To reduce modeling costs, there could be standard baseline prices for resource use per square foot of new buildings. Additional modeling would only become necessary for buildings hoping to be particularly efficient.
126. See infra notes 116-18 and accompanying text.
127. See infra notes 119-32 and accompanying text.
128. 483 U.S. 825, 836-37 (1987).
129. 512 U.S. 374, 391 (1994).
130. See infra notes 139-44 and accompanying text.
131. One potential legal challenge that this Note does not tackle is that posed by rules in some states that commit the regulation of energy to specific agencies, rather than to local governments. In such places, the Resource Use Proposal would likely not be workable. Because this Note has a nationwide focus, however, this situation is beyond its scope.
132. City of Cuyahoga Falls v. Buckeye Cmty. Hope Found., 538 U.S. 188, 198 (2003).
133. See, e.g., George Washington Univ. v. District of Columbia, 318 F.3d 203, 209 (D.C. Cir. 2003) (requiring "grave unfairness" in order to strike down land use regulation under substantive due process doctrine); United Artists Theatre Circuit, Inc. v. Twp. of Warrington, 316 F.3d 392, 399-400 (3d Cir. 2003) (finding only land use regulation that "shocks the conscience" to be irrational); Bowers v. City of Flint, 325 F.3d 758, 763 (6th Cir. 2003) (same); Baker v. Coxe, 230 F.3d 470, 474 (1st Cir. 2000) (same); Chesterfield Dev. Corp. v. City of Chesterfield, 963 F.2d 1102, 1104-05 (8th Cir. 1992) (requiring action to be "truly irrational," such as "apply[ing] a zoning ordinance only to persons whose names begin with a letter in the first half of the alphabet," in order to strike down land use regulation (internal quotation marks omitted) (citation omitted)); Coniston Corp. v. Vill. of Hoffman Estates, 844 F.2d 461, 468 (7th Cir. 1988) ("At worst, the decision here was mistaken and protectionist; it was not irrational . . . .").
134. See, e.g., Twigg v. County of Will, 627 N.E.2d 742, 745-46 (Ill. App. Ct. 1994) (finding application of local zoning ordinance to plaintiff irrational, as nearby property was being used in similar manner to plaintiff's desired use of land). The courts of Illinois, however, are unique in their activist stance toward local land use regulation; most other state courts act with considerably more deference to local governments. See Fred P. Bosselman, The Commodification of 'Nature's Metropolis': The Historical Context of Illinois' Unique Zoning Standards, 12 N. ILL. U. L. REV. 527, 528 (1992) (describing "repeated application" of rigorous judicial standards as "a unique feature of Illinois zoning law not found in other states"). Other state courts show the same kind of deference demonstrated by the federal courts of appeal. See, e.g., Cormier v. County of San Luis Obispo, 207 Cal. Rptr. 880, 885-86 (Cal. Ct. App. 1984) (affirming trial court's application of "the restricted scope of its authority" in upholding local zoning ordinance).
135. The Takings Clause states: "[N]or shall private property be taken for public use, without just compensation." U.S. CONST. amend. V. The Court has held that the Fourteenth Amendment incorporates the Takings Clause against the states. Chi., Burlington & Quincy R.R. v. City of Chicago, 166 U.S. 226, 241 (1897); see also Nollan v. Cal. Coastal Comm'n, 483 U.S. 825, 835 n.4 (1987) (referring to "incorporated Takings Clause").
136. 483 U.S. at 825.
137. Id. at 827-28.
138. Id. at 837.
139. Id.
140. Id. at 828-29.
141. Dolan v. City of Tigard, 512 U.S. 374 (1994).
142. Id. at 379-80.
143. Id. at 387-88.
144. Id. at 391, 394-95. The Court stated that "[n]o precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development." Id. at 391.
145. This entire inquiry assumes that the court has found, as it did in Nollan and Dolan, that the relevant condition would constitute a taking on its own were it not for its connection to a building permit. See id. at 384 ("Without question, had the city simply required petitioner to dedicate a strip of land . . . for public use, rather than conditioning the grant of her permit to redevelop her property on such a dedication, a taking would have occurred."); Nollan, 483 U.S. at 831 ("Had California simply required the Nollans to make an easement across their beachfront available to the public on a permanent basis . . . rather than conditioning their permit to rebuild their house on their agreeing to do so, we have no doubt there would have been a taking.").
146. See Nollan, 483 U.S. at 834-35 (describing possible legitimate purposes of permit condition and assuming, without deciding, that these were valid). The Court in Dolan did not elaborate on the requirements of substantive due process in the area of exactions, briefly stating that "the prevention of flooding . . . and the reduction of traffic congestion . . . qualify as the type[s] of legitimate public purposes we have upheld." Dolan, 512 U.S. at 387. The substantive due process inquiry is an unsettled part of the constitutional analysis of exactions. Nollan and Dolan, in their descriptions of the public purposes at stake, both cited Agins v. City of Tiburon, 447 U.S. 255 (1980), for the proposition that a "land use regulation does not effect a taking if it 'substantially advance[s] legitimate state interests' and does not 'den[y] an owner economically viable use of his land.'" Dolan, 512 U.S. at 385 (alterations in original) (quoting Agins, 447 U.S. at 260); Nollan, 483 U.S. at 834 (same). Agins was a Takings Clause case that applied the kind of means-ends analysis usually associated with substantive due process - i.e., the Court asked, does the action in question substantially advance a legitimate state interest? - as part of the takings analysis. Agins, 447 U.S. at 260-61. Agins was superseded, however, by Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005), in which the Court held that the Takings Clause does not duplicate substantive due process by requiring this type of means-ends analysis. Id. at 540. The holding in Lingle was specifically described as "not . . . disturb[ing]" to Nollan and Dolan, despite the reliance of the latter two cases on means-ends forms of analysis. Id. at 548. Nevertheless, because of the references in Nollan and Dolan to Agins, there may be some question as to whether and how the substantive due process inquiry applies to exactions post-Lingle. Dolan, 512 U.S. at 384-85; Nollan, 483 U.S. at 834. This Note will assume that Lingle did nothing to the requirements of substantive due process. A proper reading of the case shows that it merely removed the "substantially advances" analysis from the Takings inquiry and returned it to its proper home in the substantive due process context. See Lingle, 544 U.S. at 540 ("There is no question that the 'substantially advances' formula was derived from due process, not takings, precedents."). Post-Lingle, it is essential to keep these two analyses separate.
147. Nollan, 483 U.S. at 837.
148. Dolan, 512 U.S. at 391.
149. See, e.g., Home Builders Ass'n of Cent. Ariz. v. City of Scottsdale, 930 P.2d 993, 1000 (Ariz. 1997) (distinguishing Dolan on ground that "Mrs. Dolan [was required to] cede a part of her property to the city, a particularly invasive form of land regulation that the court believed justified increased judicial protection for the landowner. . . . Here, Scottsdale seeks to impose a fee, a considerably more benign form of regulation"); Krupp v. Breckenridge Sanitation Dist., 19 P.3d 687, 697 (Colo. 2001) ("Because Nollan, Dolan, and their progeny applied heightened scrutiny only where the government demanded real property as a condition of development, we find that they are not applicable to a general development fee.").
150. See, e.g., Ehrlich v. City of Culver City, 911 P.2d 429, 447-48 (Cal. 1996) (applying Nollan and Dolan to impact fee imposed by planning commission and finding essential nexus); Home Builders Ass'n of Dayton & Miami Valley v. City of Beavercreek, 729 N.E.2d 349, 355 (Ohio 2000) (applying Nollan and Dolan to impact fee because "[although impact fees do not threaten property rights to the same degree as land use exactions or zoning laws, there are similarities"). The Ehrlich court explained the applicable test, finding a clear example of an essential nexus: "Nor is there any genuine dispute that the . . . fee, which the city has committed to the purchase of additional recreational facilities, will substantially advance its legitimate interest in correcting a demonstrated deficiency in municipal recreational resources." 911 P.2d at 448 (emphasis added). Under this test, a court should strike down, for example, an impact fee assessed for increased impervious surface coverage when the money raised from the fee is used to fund local schools.
151. See Inna Reznik, Note, The Distinction Between Legislative and Adjudicative Decisions in Dolan v. City of Tigard, 75 N.Y.U. L. REV. 242, 252-57 (2000) (discussing split in decisions).
152. See, e.g., City of Scottsdale, 930 P.2d at 1000 (finding Dolan inapplicable to "legislative" as opposed to "adjudicative" impact fees); San Remo Hotel L.P. v. City & County of San Francisco, 41 P.3d 87, 103-05 (Cal. 2002) (finding Nollan and Dolan inapplicable to non-discretionary exactions); Parking Ass'n of Ga. v. City of Atlanta, 450 S.E.2d 200, 203 n.3 (Ga. 1994) (finding Dolan inapplicable to "legislative determination[s]"), cert. denied, 515 U.S. 1116 (1995); Rogers Mach., Inc. v. Washington County, 45 P.3d 966, 982 (Or. Ct. App. 2002) (finding Nollan and Dolan inapplicable to nondiscretionary impact fees). In a dissent from a denial of certiorari, Justice Thomas noted that this issue deserved resolution. Parking Ass'n, 515 U.S. at 1117-18 (Thomas, J., dissenting).
153. See, e.g., Amoco Oil Co. v. Village of Schaumburg, 661 N.E.2d 380, 390-91 (Ill. App. Ct. 1995) (declining to adopt legislative-adjudicative distinction and applying Dolan to legislative impact fee); Curtis v. Town of South Thomaston, 708 A.2d 657, 660 (Me. 1998) (stating that "the legislative nature of the exaction is but one factor in our takings analysis" under Dolan); J.C. Reeves Corp. v. Clackamas County, 887 P.2d 360, 365 (Or. Ct. App. 1994) (finding "'the character of the [condition] remains the type that is subject to the analysis in Dolan,' whether it is legislatively required or a case-specific formulation" (alteration in original)); Town of Flower Mound v. Stafford Estates L.P., 135 S.W.3d 620, 641 (Tex. 2004) (applying Dolan to legislative impact fee scheme and considering possibility that "government could 'gang up' on particular groups to force extractions that a majority of constituents would not only tolerate but applaud, so long as burdens they would otherwise bear were shifted to others").
154. There are three reasons this might be the case. First, Fifth Amendment jurisprudence tells us that government impositions on land are uniquely burdensome. See United States v. Sperry Corp., 493 U.S. 52, 62 n.9 (1989) (holding that, because "money is fungible," fees are not akin to physical takings). But see Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 164 (1980) (applying Takings Clause to appropriation of interest on funds deposited in court registry). Second, Nollan expressed particular concern for the extortionate nature of individualized exactions, reciting an oft-repeated maxim about takings jurisprudence: "One of the principal purposes of the Takings Clause is 'to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'" Nollan v. Cal. Coastal Comm'n, 483 U.S. 825, 835 n.4 (1987) (quoting Armstrong v. United States, 364 U.S. 40, 49 (1960)). Third, Dolan itself explicitly distinguished earlier cases that deferred to legislative judgments regarding development: "The sort of land use regulations discussed in the cases . . . . involved essentially legislative determinations classifying entire areas of the city, whereas here the city made an adjudicative decision to condition petitioner's application for a building permit on an individual parcel." Dolan v. City of Tigard, 512 U.S. 374, 385 (1994); see also Reznik, supra note 135, at 251 (characterizing Dolan as explicitly limited to adjudicative determinations). Despite these strong arguments, Justice Thomas, joined by Justice O'Connor, dissented from a denial of certiorari to resolve this specific issue and indicated a belief that Nollan and Dolan do apply to legislative judgments: It is not clear why the existence of a taking should turn on the type of governmental entity responsible for the taking. A city council can take property just as well as a planning commission can. Moreover, the general applicability of the ordinance should not be relevant in a takings analysis. . . . The distinction between sweeping legislative takings and particularized administrative takings appears to be a distinction without a constitutional difference. Parking Ass'n, 515 U.S. at 1117-18 (Thomas, J., dissenting).
155. Prior to the announcement of Nollan's "essential nexus" test, many state courts employed a "rational nexus" test. See Steven B. Schwanke, Local Governments and Impact Fees: Public Need, Property Rights, and Judicial Standards, 4 J. LAND USE & ENVTL. L. 215, 234-39 (1989) (describing evolution of rational nexus test). In fact, Nollan derived the essential nexus test from state decisions using rational nexus analysis. See Nollan, 483 U.S. at 839-40 (listing state decisions in agreement with Court's ruling under essential nexus test). Moreover, Dolan derived the "rough proportionality" test from the "reasonable relationship" standard used by state courts. Dolan, 512 U.S. at 391; see also City of Scottsdale, 930 P.2d at 999 ('"Roughly proportional' is actually a term substituted for 'reasonable relationship' to avoid confusion with 'rational basis' as a standard of scrutiny."); City of Beavercreek, 729 N.E.2d at 354-55 (characterizing "dual rational nexus" state test as based on Nollan and Dolan). Many commentators have noted this similarity. See, e.g., ALTSHULER ET AL., supra note 100, at 53 (describing Nollan's standard as "close nexus" test derived from state rational nexus tests);
156. Mark W. Cordes, Legal Limits on Development Exactions: Responding to Nollan and Dolan, 15 N. ILL. U. L. REV. 513, 514-15 (1995) (noting that Court in Dolan "suggested it was following what it identified as the middle position" among state tests for proportionality).
157. The rational nexus test draws on state law provisions differentiating between taxes and fees, with the aim of preventing "double-billfing]." ALTSHULER ET AL., supra note 100, at 52. Nollan and Dolan, of course, are grounded in the Federal Takings Clause. Dolan, 512 U.S. at 383-84; Nollan, 483 U.S. at 829, 831, 834.
158. ALTSHULER ET AL., supra note 100, at 51-52.
159. See, e.g., City of Scottsdale, 930 P.2d at 999 (finding developer "had the burden of showing that [the City's] fee bore no reasonable relationship to the public burden created by the proposed development"); St. Johns County v. Ne. Fla. Builders Ass'n, 583 So. 2d 635, 637 (Fla. 1991) ("'[T]he local government must demonstrate a reasonable connection, or rational nexus, between the need for additional capital facilities and the growth in population generated by the subdivision.'" (quoting Hollywood, Inc. v. Broward County, 431 So. 2d 606, 611 (Fla. Dist. Ct. App. 1983))); Brazer v. Borough of Mountainside, 262 A.2d 857, 862 (N.J. 1970) ("[A] subdivider may be compelled only to assume a cost 'which bears a rational nexus to the needs created by, and benefits conferred upon, the subdivision.'" (quoting Longridge Builders, Inc. v. Planning Bd., 245 A.2d 336, 337 (N.J. 1968))).
160. See, e.g., St. Johns County, 583 So. 2d at 637 ("[T]he government must show a reasonable connection, or rational nexus, between the expenditures of the funds collected and the benefits accruing to the subdivision. In order to satisfy this latter requirement, the ordinance must specifically earmark the funds collected for use in acquiring capital facilities to benefit the new residents."); City of Beavercreek, 729 N.E.2d at 354-55 ("The dual rational nexus test requires a court to determine . . . whether there is a reasonable connection between the expenditure of the funds collected through the imposition of an impact fee, and the benefits accruing to the subdivision.").
161. Not all states have always applied the rational nexus test to impact fees. California, before Nollan, applied the flexible reasonable relationship test, which imposed a much less stringent requirement on local governments. ALTSHULER ET AL., supra note 100, at 52; see also Associated Home Builders of Greater E. Bay v. City of Walnut Creek, 484 P.2d 606, 615-16 (Cal. 1971) (announcing "reasonable relationship test"). Several other states - including New York and Montana - also applied deferential tests before Nollan and Dolan. See Cordes, supra note 139, at 523-24 (summarizing decisions). Under these tests, the impact fee proposals would likely be subject to minimal scrutiny. Illinois currently applies the "specifically and uniquely attributable" test, which sets a higher bar than that imposed by any other state in requiring "a conclusive, precise snowing that the public need to be served is 100 percent attributable to the development in question." ALTSHULER ET AL., supra note 100, at 52; see also Pioneer Trust & Sav. Bank v. Village of Mount Prospect, 176 N.E.2d 799, 802 (Ill. 1961) (announcing specifically and uniquely attributable test). Massachusetts also employs a relatively stringent test. See Emerson Coll. v. City of Boston, 462 N.E.2d 1098, 1105-06 (Mass. 1984) ("Fees are legitimate to the extent that the services for which they are imposed are sufficiently particularized as to justify distribution of the costs among a limited group . . . ."). Neither of these tests would likely permit the kind of impact fee proposals offered in this Note.
162. In addition to federal substantive due process rules, states also have their own substantive due process tests for land use regulation that would need to be met regardless of the applicability of Nollan and Dolan. See supra note 118 and accompanying text.
163. E.g., Bloom v. City of Fort Collins, 784 P.2d 304, 309 (Colo. 1989) (upholding transportation impact fee); Contractors & Builders Ass'n v. City of Dunedin, 329 So. 2d 314, 319-20 (Fla. 1976) (upholding sewer and water connection fees); see also CLANCY MULLEN, DUNCAN ASSOCS., NATIONAL IMPACT FEE SURVEY: 2007 (2007), available at http://impactfees.com/ 2006survey.pdf (listing impact fees by type in localities across country and showing that many municipalities assess sewer, water, and road fees); Been, supra note 95, at 141 (describing widespread use of sewer, water, and road impact fees).
164. As of 2005, twenty-seven states had adopted impact fee enabling acts. CLANCY MULLEN, DUNCAN ASSOCS., STATE IMPACT FEE ENABLING ACTS 1 (2006), available at http://impactfees.com/publications%20pdf/ summary%20of%20state%20acts.pdf. Nevertheless, impact fees existed before these enabling acts, and the statutes mostly codify pre-existing judicial rules, albeit with occasional added restraints. ALTSHULER ET AL., supra note 100, at 54. As of 2005, every state enabling act permitted the assessment of impact fees for roads, and every state act but four (Illinois, Pennsylvania, Virginia, and Washington) permitted fees for sewer and water connections. MULLEN, supra, at 2.
165. See supra note 51 (discussing regulation of energy and water use through building and plumbing codes).
166. See supra notes 24-25 and accompanying text for a discussion of these benefits.
167. 272 U.S. 365 (1926).
168. See id. at 394-95 (describing how larger buildings "interfer[e] by their height and bulk with the free circulation of air and monopoliz[e] the rays of the sun which otherwise would fall upon the smaller homes").
169. See supra note 10 and accompanying text. This problem might be mitigated by revisions to the LEED standards, which, by setting baseline requirements in different areas, could reduce the "low-hanging fruit" problem.
170. Dolan v. City of Tigard, 512 U.S. 374, 395-96 (1994).
171. In Nollan, the crucial impact of the development in question was a predicted decrease in beach use by the general public, something that is very difficult to price. Nollan v. Cal. Coastal Comm'n, 483 U.S. 825, 835 (1987). In Dolan, some of the relevant impacts involved stream flooding and traffic congestion, both of which generally result in unpriced externalities even though they might also generate real dollar costs for a municipality (e.g., cleanup costs or the costs of building new roads). Dolan, 512 U.S. at 387.