Q: Minnesota is experiencing a housing affordability crisis. Why did you author HF3044 to help address the regulatory burdens facing homebuyers?
Rep. Vogel: I realize there are many factors driving the cost increases, and although regulations at the state level are only part of those drivers, they play a significant part. The bill introduced this year was revised from the previous one HF1001, because there was so much pushback by state regulatory agencies saying the legislature should not have a major part with writing regulations and rules.
With the hope of overcoming those objections HF 3044 put more emphasis on breaking down silos between agencies by using an overall net effect of cost increase, and then only notifying the legislature of changes if they were over a the threshold. The hope was by addressing some of the previous year’s concerns the governor would then be able to support the bill. Unfortunately, the agencies still opposed the changes so the effort to build partnerships between agencies to better control costs and get them working together more closely needs to continue.
Q: How else can the legislature playa role in addressing housing affordability and issues facing first-time homebuyers?
Rep. Vogel: I think we need to be more resourceful in looking at what regulation is necessary, and the manner by which it is driven. The basic scientific rule of “for every action there is a reaction”, applies in many ways to life actions. What seems to be missing in all levels of government rule, regulation, and fee making is there is a lack of understanding that there is no free lunch.
Whether it’s regulation or fees/ charges everything is added to the cost of a home, and the homeowner pays for it. Elected officials need to look at the cost/benefi t of everything that touches a family when they are looking to have a home, and ensure those they give the authority to in implementing the statutes and ordinances they pass act consistent with the homeowners overall best interest.
Q: As a banker by day, what changes have you observed over the years with the home buying process?
Rep. Vogel: I believe the cumulative effect of regulations overall, from both a construction and financing perspective, have taken away the creativity which existed years ago in allowing families to work in partnership with everyone involved in the home ownership process. I recognize some of the regulation was driven by “bad players” in the different industries in homebuilding. Unfortunately, in a well intended effort to protect families from those abuses the overwhelming majority of good players have lost the flexibility and individualized teamwork they had, and now it seems too much time is spent on dealing with regulatory issues versus finding the best solution for the homeowners.
Q: Any additional comments?
Rep. Vogel: When my wife and I started out we rented an apartment for a few years and saved enough for a down payment on a small house. We spent a few years making improvements which allowed us to take the “sweat equity”, and some modest inflationary appreciation, to build a new larger home. I spent most of the summer of 1980 working on parts of that home, in tandem with the contractor, to get as much house as we could for the money we had to spend. With all the changes in today’s environment I don’t think what we did would be possible, since the additional costs of fees and charges, as well as regulations, probably would have precluded me from doing a lot of the work I did, or would not be allowed. We are still living in the home we built in 1980, and have not experienced any significant problems or deficiencies. I know we need a framework to protect us from unscrupulous players, but we must balance that with taking away people’s rights to provide homes for their families because that freedom in 1980 allowed us as a family to build and enjoy a house that continues to be our home.