A 2025 increase to development impact fees passed by the Palm Coast City Council was ruled illegal in court on Friday. Judge Sandra Upchurch found Palm Coast to have violated SB 180, a state law passed in June 2025 which placed limitations on development restrictions by local governments. Her ruling declared Palm Coast’s impact fees as being a land development regulation as covered in SB 180.
The same month SB 180 passed, Palm Coast increased fire and transportation fees by over double, as well as parks impact fees by 73%. Ordinarily they’d have been constrained to a maximum increase of 50%, but the city utilized an exception which allowed greater hikes under ‘extraordinary circumstances’.
The ruling will likely take a significant toll on the city’s revenue in the coming years. This comes as Florida voters in November may approve a ballot amendment which would eliminate a massive swath of residential property taxes. This would do away with a large portion of many local governments’ revenue, and Palm Coast has already made budget cuts in preparation.
“The City of Palm Coast does not agree with today’s court ruling in the City’s legal case involving development impact fees and is reviewing all available legal options, including an appeal,” a city spokesperson said on Friday. “The case remains ongoing, and today’s ruling does not result in any immediate change to the City’s current impact fee schedule. The City will continue reviewing the ruling and its legal options as the case moves forward.”
The impact fee hikes were challenged by the Flagler Home Builders Association. Their organization filed a motion for summary judgment based on a claim that Palm Coast was in violation of SB 180.
In October 2025, the Palm Coast City Council considered joining 25 other Florida municipalities in a lawsuit against the state government over SB 180. Though they held off, the City Council maintained a displeasure over what has been criticized as an erosion of home rule.
