Legislative Wrap-Up: Housing Industry

The Legislature officially adjourned the 2019 special session. Several industry-related issues were signed into law by Gov. Walz. Headlining the session for the housing industry was the creation of two bodies, a commission and select committee to study and make concrete recommendations for policy changes relating to housing affordability and homeowner access. Also gaining traction was a significant budget commitment to housing subsidy programs. Beyond those issues, there were several other measures relating to business operations in housing and construction.

Legislative Commission on Housing Affordability

The multiyear commission is charged with analyzing issues relating to housing affordability and will ultimately recommend housing policies that balance safety, durability, local control and affordability. It is comprised of two DFLers from the House, two DFLers from the Senate, two Republicans from the House and two Republicans from the Senate.

Contractor Recovery Fund; Consumer Awareness Campaign

Under this provision, the commissioner of labor and industry will conduct a statewide consumer awareness campaign in fiscal years 2020 and 2021 highlighting the importance of hiring licensed contractors as well as the consequences of hiring unlicensed contractors. This will be funded with dollars from the contractor recovery fund, up to $500,000 per year.

Wage Theft

Under this provision signed into law, wage theft in excess of $1,000 is a felony crime. It also penalizes retaliation against employees who report wage theft. The Department of Labor and Industry and the attorney general are tasked with enforcement.

Contractor Continuing Education Curriculum - Business Management

New legislation signed into law requires one hour of business management strategies training as a part of 14 credit hours required for Minnesota contractors within their two-year licensing period. This is similar to the currently required energy hour in that it requires specific curriculum, but does not add to the total number of hours required within the two-year licensing period.

Select Committee on Homeownership Affordability and Availability

The Select Committee is made up of three senators from the majority party and two from the minority party. It is charged with making findings and recommendations to the Senate on housing-related policy matters relating to affordability and homeownership access.

Simplifying Real Estate Advertising for Licensees

A bill to simplify advertising requirements for real estate signees was signed into law. The old standard rule of having the brokerage name more prominently displayed than the licensee is replaced with a requirement that a licensee “clearly and conspicuously display” the brokerage name in any advertising undertaken by the licensee.

Retainage

Under the provision signed into law, public and private entities are required to pay out all retainage within 60 days of substantial completion. After substantial completion, the provision allows for withholding of up to 250% of the value for incomplete or defective work.

License Number to be Displayed

Any vehicle used by a plumbing contractor while performing plumbing work shall have the contractor’s name and license number in contrasting color affi xed to each side of the vehicle.

Housing Subsidy for Affordable Housing Projects

Though a small portion of the overall housing market, the subsidized housing efforts make critical investments in communities across the state. The Legislature and governor agreed to a $78 million investment for emergency shelter, rental assistance, preservation and production.

• $60 million in Housing Infrastructure Bonds to build and preserve affordable housing.

• $5 million increase in onetime funding to the Economic Development & Housing Challenge Program, a key funding source to develop affordable multifamily and single family homes.

• $10 million/biennium increase in ongoing funding to Minnesota Finance Housing Agency (MHFA)

• $3 million one-time funding to Emergency Services Program (Department of Health & Human Services)

Third-Party Consultant Reforms

SF 998 was signed into law by Gov. Walz after broad bi-partisan support. Under the new statute parties seeking “a permit, license, or other approval relating to real estate development or construction” have the authority to request a written, nonbinding estimate of the consulting fees to be charged as part of the permit application.