Federal Court: Ohio Cities Can’t Scam Homeowners with “Annual Fees.”
Cleveland Heights fees on leasing are an unconstitutional taking.
Cleveland, OH – A federal District Court this week ruled unconstitutional City of Cleveland Heights practice of imposing special annual “registration” and “licensing” fees on city homeowners, while also reprimanding the City attorneys for invoicing and collecting those fees years after they were repealed.
The 1851 Center for Constitutional Law’s victory comes after Cleveland Heights attorneys threatened housing providers with jail time if they did not pay fees no longer required by law. The City attempted to cover its tracks by reenacting the assessments years later.
However, even once reenacted, imposing annual fees on homeownership and then spending those funds on anything is an unconstitutional taking every bit as much as if the city had directly mugged homeowners and pocketed the cash.
The ruling, by Northern District of Ohio Judge Philip Calabrese, holds that the City must stop collecting the assessments and return those already collected to Cleveland Heights homeowners, explaining as follows:
- The City does “not explain what legitimate government purpose could be served by collecting money from private parties without legal authority to do so. Nor is the Court able to conjure any.”
- “By virtue of living outside of Cleveland Heights, Plaintiffs must pay an additional $100 fee without receiving any benefit. Therefore, the registration fee more closely resembles a ‘booty’ that the City has labeled a user fee . . . in other words, a monetary exaction” that is “an abuse in the permitting process.”
- “This case contains no evidence that out-of-county owners of residential rental structures create negative externalities or burdens for the City. Accordingly, the City does not know whether out-of-county landlords increase costs for the City that must be offset by an additional registration fee. Put another way, the record contains no evidence that would allow the Court to undertake rough proportionality analysis under any standard. For these reasons, the $100 out-of-county registration fee does not satisfy the essential nexus and rough proportionality requirements of Nollan and Dolan. Accordingly, this monetary exaction since its reenactment on June 22, 2023 constitutes a taking without just compensation under the Fifth Amendment, made applicable to the City by the Fourteenth Amendment.”
The case now turns to refunding to homeowners the hundreds of thousands of dollars in unlawfully-seized fees.
“Both the state and federal constitutions forbid Ohio cities from poaching certain homeowners to pay for general public programs just because they’re sitting ducks,” explained 1851 Center Executive Director Maurice Thompson. “With housing affordability continuously threatened by local government policies, this ruling empowers Ohioans to protect themselves when cities attempt to swindle them through improper taxes, fees, and assessments.”
Read the Court’s Order HERE.
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The 1851 Center for Constitutional Law is a nonprofit, nonpartisan legal center dedicated to protecting the constitutional rights of Ohioans from government abuse. The 1851 Center litigates constitutional issues related to property rights, regulation, taxation, and searches and seizures.