Two Hoback residents are suing Teton County in federal court for what they claim are unlawful development fees.
The lawsuit comes on the heels of a legislative session ripe with bills that targeted the county’s fees, which are intended to offset the impacts development has on affordable housing.
Shelby and Trey Scharp filed the complaint because they don’t believe they should have to subsidize the county’s affordable housing program for “problems they didn’t create.”
It’s not news that Teton County has one of the most expensive housing markets in the country. One contributing factor is that jobs far outpace available housing. The county is only adding new units at half the rate of jobs, which is still better than the surrounding area. Even then, many units in town are often priced at rates unattainable for much of the local workforce.
The couple currently lives in a cabin near Hoback Junction, south of Jackson. Both have been dude ranch managers at Flat Creek Ranch, an hour’s drive north of Jackson, for the last two decades.
The Scharps have plans to construct an on-site single-family home, with the goal of turning the cabin into a rental unit, according to a press release from the law firm representing the couple.
Before they could get the permit for the new building, the Scharps had to pay a $24,325 fee that goes toward the county’s workforce and affordable housing mitigation efforts.
The complaint argues this fee is unconstitutional, according to the Pacific Legal Foundation attorney, David Deerson, representing the Scharps free of charge.
“The Scharps didn’t create the affordable housing problem in Teton County. In fact, they’re helping to solve it by building new units and adding new supply,” Deerson said.
His firm has settled previous lawsuits against similar housing fees, including a 2024 case in the Sonoma County, California, town of Healdsburg.
KHOL reached out to the Scharps through their attorney but didn’t immediately hear back.
Teton County had not yet been served with the complaint when reached for comment.
The county attorney referred to its most recent “nexus study” in a statement, which determines how much property owners like the Scharps have to pay in housing fees to get new building permits. The “nexus study” says it uses publicly available data to provide “a technically robust and legally defensible fee program” linking new development to the creation of new jobs that will require workers, who will need to be housed.
The residential fee is assessed on a combination of factors, including the number of new housing units a project builds compared to the number of units needed in the area.
“Teton County strongly stands by our most recent affordable housing nexus study completed in 2023,” Chief Deputy County Attorney Keith Gingery said in an email. “The county’s adoption of affordable housing mitigation fees is fully compliant with all constitutional provisions requiring an essential nexus and proportionality.”
Mark Newcomb, chair of the Board of County Commissioners, declined to comment for now and referred KHOL to Gingery’s statement.
“I will defend it rigorously through the court process.”
Richard “Dick” Stout, Teton County attorney
This isn’t the first time the county’s program has been challenged. It faced a battle in the Wyoming Legislature earlier this year, with members of the Freedom Caucus writing an amendment that would have barred the town and county from requiring the mitigation fees, though it ultimately failed.
The bill, Senate File 40, had the backing of several prominent Teton County Republicans, including Rebecca Bextel, who recently lost her bid for state GOP chair.
“I feel confident in the legal footing we have and if we need to defend it, we will stand up and defend it,” County Commissioner Natalia Macker previously told KHOL in a March interview.
The county’s prosecuting attorney, Richard “Dick” Stout, said he also believes the housing program fees are constitutional.
“I will defend it rigorously through the court process,” Stout said in a text message.
Fees & taxes. Taxes& Fees. Never ends
Hilarious! A 4k square foot home is a 3 to 4 million dollar LODGE. 25k for a permit seems a lot until you actually look at the county. They are going to charge folks a grand a weekend to stay in their cute cabin and ride their unicorns. It’s not agregious.
The sacred cow for liberals in this county is “affordable housing”. Please don’t come here knowing that things are expensive and then demand I provide you “affordable housing” to live in my neighborhood. Sorry, you don’t get to live somewhere just because you want to.
Given the court case highlighting housing mitigation – I want to put it in context for you – a 4000 sqft house costs between $3-4 million in construction alone – not including the land, and not including any town or county fees.
If we had a 1% RETT on a $4MM house, that would be $40,000. Unfortunately, the state doesn’t allow sales tax on property sales. The mitigation rate is _less than this_ and is only collected once on building ultimately to mitigate the impact that new units create by creating the need for _more workers_.
Do I think that mitigation is perfect? No. I think there’s a lot we could change on the state level to make Wyoming less attractive to the ultrawealthy, but we keep moving in the opposite direction.
Mike, I’m saving your comment for my file because it actually illustrates why courts must (and do) closely scrutinize mitigation impact fees and exactions. Your comment compares the impact ‘mitigation’ fee to revenue which could be collected through an exercise of the more general power to collect taxes, and then observes that the general taxing power is unavailable in this circumstance, so the people subject to a mitigation fee/exaction should just bear it, because the amount of money demanded would be similar to what could be collected with an unavailable tax. This is precisely the threat posed by mitigation fees and other exactions and which has been recognized by our courts for decades- that governments will use such fees and exactions to accomplish things they could not thru the general taxing power, because taxes are unpopular, and the electorate would always favor if perceived deeper pockets are solely responsible for solving a public problem. Your comment that a person’s home is more valuable than the exaction is also an old and discarded government rejoinder. As the Court has observed “So long as the building permit is more valuable than any just compensation the owner could hope to receive for the [exaction], the owner is likely to accede to the government’s demand, no matter how unreasonable. Extortionate demands of this sort frustrate the Fifth Amendment right to just compensation, and the unconstitutional conditions doctrine prohibits them.” More generally, the case does not turn on the value of the Scharps’ new home or whether the fee could be used by the local government for their purported purposes. Those are different questions and different claims. The case raises primarily one claim, which revolves around this issue: is housing unaffordability worsened by the construction of new housing? This is the County’s viewpoint and one which flies in the face of basic economics and which runs counter to the overwhelming bipartisan consensus that making housing more affordable will require building more housing – not adding NRO overlays, permitting fees, development constraints, single family zoning restrictions, huge minimum lot sizes, etc. – all things Teton County does – not the Scharps – which makes housing scarce and desirable in Teton County!
According to a news piece in the News and Guide, the proposed structure will contain approximately 4,000 square feet. One has to be pretty well heeled to afford a structure of this size. Will the owners be doing all the maintenance themselves? It takes workers just to build homes. They live somewhere, probably not in Jackson. If one can afford a 4,000 square foot home, at say, $800/SF then $24K is a drop in the bucket, approximately 0.75% of the total cost. Talk about “entitlements”!
My wife and I moved to Laramie two years ago, and we both love the Wyoming and it’s people. I work in commercial real estate for a company located back east. I am not looking to become a developer in WY. Wyoming (and the entire Mountain West region) have a housing supply problem.
I have no problem with any County using Development Fees to help create more affordable housing (as long as the funds are invested wisely). But what caught my attention is that this Fee appears to be excessive – $24k in Fees to build one (1) unit of housing!! I admit that I am unfamiliar with the details of the County’s program, but one size fits all is not the right approach. If a Developer wanted to build a 50-unit project, then $1.2mm in Impact Fees would be appropriate. But a couple desiring to build one unit pays the same pro-rata level of Fees? Not smart.