The Minnesota Legislature will gavel in the 2018 Legislative Session on Feb. 20.
Housing First Minnesota and the Minnesota Association of Realtors will once again present a collection of proposals that will make up the Minnesota Homeownership Initiative. These solutions will address many of the obstacles currently facing the housing industry: labor, regulatory burden and affordability for first-time buyers.
First-Time Homebuyer Savings Account
Last session, the legislature took a positive step forward in encouraging Minnesotans to save more of their own money to purchase their first homes through the establishment of the First-Time Homebuyer Savings Account. However, work remains.
As current law allows, first-time homebuyers and those re-entering the housing market can establish savings accounts to be used towards the purchase of a house and/or closing
costs. Married joint filers can contribute up to $28,000 and individuals up to $14,000 each year in a standard savings account. Interest and dividend gains can be claimed as a state tax deduction.
In order to incentivize more Minnesotans to save for their dream home, the Minnesota Homeownership Initiative will propose expanding the state tax deduction beyond the interest earned.
Addressing the Regulatory Burden
The regulatory costs associated with new construction have surged over the past decade. Regulations are needed to ensure safety and durability in new home construction, but the regulatory structure must meet these objectives at a price that families can afford.
The cost of complying with local and state government regulations negatively affects the affordability of housing. Every mandate, fee and project delay represents a real cost that is passed on to homebuyers.
Some of the challenges faced by homebuyer include:
In Minnesota, for every $1,000 increase in the price of a home, about 4,000 households are priced out of the market for a median-priced new home.
Regulatory Costs Have Soared
National estimates show that, on average, regulations imposed by government at all levels account for nearly 25 percent of the final price point of a home.
Affordability Gets Lost in Regulatory Process
Well-intentioned policy work in the various state agencies aims to meet regulatory goals, but too often it misses the equally important goal of minimizing cost impacts for homeowners.
Homeownership is less Attainable for too Many
The homeownership rate is at decades-lowlevels both in Minnesota and nationally.Greater affordability in all homes means more homeownership for all.
During the 2017 legislative session, Rep. Bob Vogel (Elko New Market) and Sen. Mary Kiffmeyer (Big Lake) proposed a bill that would allow for the legislative committee with jurisdiction to review rulemaking proposals which would impact individual homeowner costs to purchase or remodel a home by $1,000 or more. Similar bills are expected to emerge this session.