Fees & public finance
Exaction
Any condition of development approval taking money, land or improvements — policed by the essential-nexus and rough-proportionality tests.
Definition
An exaction is any condition attached to a development approval that requires the developer to give something up: dedicate land, construct public improvements, or pay money (impact fees, in-lieu fees). The constitutional guardrails come from the takings cases — Nollan (1987) requires an essential nexus between the condition and the project's impact, Dolan (1994) requires rough proportionality in degree, Koontz (2013) extended both to monetary demands, and Sheetz (2024) applied them to legislatively adopted fees. Statutes then supply the machinery: the Mitigation Fee Act for fees and the Subdivision Map Act for map conditions.
Why it matters in an underwrite
Classification drives remedies. A true exaction can be protested under § 66020 within 90 days and tested against nexus and proportionality; a Mello-Roos special tax or a § 66013 utility capacity charge cannot — each has its own, shorter challenge track. And benefits a developer volunteers in a development agreement largely escape Nollan/Dolan scrutiny afterward, so price every commitment before signing, not after.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.