Legislators call for building permit refunds, audits

Legislators call for building permit refunds, audits

The Housing Affordability Institute released its latest report, Building Permit Fees: Boosting the Bottom Line for Minnesota Cities, in August. This first full-length, single-subject paper reviews and raises questions about the proportionality of building permit fees in cities.

Under Minnesota law, municipalities collecting more than $5,000 in construction and development revenue annually are required to submit data to the Department of Labor and Industry (DLI). A review of the reports sent to DLI from 2014-2018 reveal that Minnesota municipalities gained at least $78 million in excess permit revenue.

“I make my decisions as a legislator based on facts, and we clearly have facts pointing to a problem,” said Rep. Barb Haley (R-Red Wing), member of the Legislative Commission on Housing Affordability. “I consider $78 million in overcharges to be an illegal tax on housing. This is something we have to address, in addition to many more, in order to bring down the cost of housing.”

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Frank Kottschade: Setting the precedent for property rights

Frank Kottschade: Setting the precedent for property rights

U.S. Supreme Court ruling cites Housing First Minnesota member Frank Kottschade

The U.S. Supreme Court issued a landmark industry victory in its decision to remove an obstacle to address government takings of property. In Knick v. Township of Scott, the court overruled a 1985 precedent (Williamson County) that required a property owner who claimed a regulatory taking to first approach the state court before being allowed to gain access to federal court.

At issue, was the catch-22 where a property owner was forced to go through state courts first, but if the court ruled against the owner, the claim is barred from appeal to the federal courts.

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Housing First Minnesota sues Dayton over transportation fee

Housing First Minnesota sues Dayton over transportation fee

Following the city of Dayton’s decision in July to create an off-site transportation fee, Housing First Minnesota initiated a legal action against the city in Hennepin County District Court. Housing First Minnesota contends that the creation of such a fee is in violation of established law in the State of Minnesota.

The Minnesota Supreme Court addressed this issue just last year, when it unanimously ruled that requiring off-site transportation fees are illegal in the Harstad v. Woodbury case.

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A first of its kind: Select Committee on Homeownership convenes

A first of its kind: Select Committee on Homeownership convenes

In a historic moment for homeowners in Minnesota, state senators on Aug. 13 convened the Select Committee on Homeownership Affordability and Availability at the Minnesota Senate Office Building. A first-of-its-kind forum, the Select Committee was approved by the Minnesota Senate in the closing days of the 2019 legislative session.

The committee, chaired by Sen. Rich Draheim (R-Madison Lake) and comprised of members from both political parties, will make findings and recommendations to the Minnesota Senate on ways to increase homeownership opportunities across the state.

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Answering the call for action

Answering the call for action

As the cost of a new home increases, two cities take proactive approaches

With the cost of housing increasing at a rate much faster than wages, two cities in Minnesota are working to reduce what new-home buyers pay.

Why? Growth is good for Minnesota cities. New homes bring new residents which, in turn, create jobs and expand the tax base of cities.

According to a 2015 study from the National Association of Home Builders, for every 100 new homes built there is a one-year economic impact of $28.7 million in economic activity, $3.6 million in local government revenue and 395 jobs created.

In the following years, the sustained effect of these 100 homes is $1 million in added local government revenue, 69 jobs and $4.1 million in added economic activity.

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Majority of Minnesotans Facing a Shortage of Affordable Home Options

Majority of Minnesotans Facing a Shortage of Affordable Home Options

Results of a recently conducted statewide survey show that a majority of Minnesotans are facing a shortage of affordable home options.

“Minnesotans at all levels of the housing ecosystem are facing an affordability challenge,” said David Siegel, executive director of Housing First Minnesota. “As we enter the final weeks of the legislative session, we are hopeful that the legislature and Governor Walz will show they are serious about addressing this problem.”

A majority of Minnesotans also stated that the best way to make Minnesota’s housing market more affordable is by reducing fees and costly regulations.

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Legislature Weighs Housing Affordability

Legislature Weighs Housing Affordability

With growing pressure to address the burgeoning housing affordability crisis, the legislature is considering several initiatives, ranging from housing subsidies to the creation of a commission on housing affordability.

Leading the housing policy discussion, HF 1208 (Carlson, A., DFL-Bloomington)/SF 1294 (Draheim, R-Madison Lake) would create a legislative commission to review regulatory costs, housing innovations and homeownership access issues across the housing spectrum.

Modeled after existing legislative commissions covering complex policy issues like pensions and data privacy, the measure would seat eight legislators, two from each caucus, to review and make housing policy recommendations.

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Homeowners Priced Out

Homeowners Priced Out

New Report from the Housing Affordability Institute Reveals Why The Housing Market Fails Too Many Minnesota Families

A new report titled Priced Out: The True Cost of Minnesota’s Broken Housing Market provides a detailed look at the growing regulatory pressures on new homes, which is having a powerful effect on the entire housing ecosystem of our state. The research demonstrates that up to one-third of the price of a new Twin Cities home is due to local, regional and state housing policies.

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Let's Fix It

Let's Fix It

As we transition into the new year, the opportunities and challenges facing the housing industry are remarkable. On the plus side, our economy is strong, employment is steady and demand for housing remains on the upswing. Those positive housing market attributes are balanced with challenges, including a 10-year low in housing affordability, steep regulatory costs placed on new homes and a workforce that is not replenishing at a healthy rate.

The Governor’s Task Force on Housing provided key conclusions in its final report, which was released last August. Key recommendations include building 300,000 homes by 2030, driven primarily by the private market; establishing formal review of regulatory cost drivers; and prioritization of housing as a key building block by policy makers.

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Legislative Preview: Housing Emerges as Top Tier Issue

Legislative Preview: Housing Emerges as Top Tier Issue

When the legislature gavels in to begin a new legislative biennium, many issues are on the docket waiting to be addressed. Housing affordability is poised to be one of the key issues.

As the price of housing, from rentals to single-family homeownership, continues to increase across Minnesota, more families are impacted by the increasing burden of housing affordability and our region’s competitiveness is at risk.

In a stark reminder of the housing market challenges, home affordability in the Twin Cities metro area hit another decade-low in October 2018, according to the Minneapolis Area Association of Realtors’ (MAAR) latest survey released in November 2018. A combination of rising interest rates, rising construction costs, slow wage growth and low inventory has exacerbated the issue.

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2018 Housing Report Card: Good, But Needs Improvement

2018 Housing Report Card: Good, But Needs Improvement

Housing Affordability Issue Continues to Grow

According to the 2018 single-family permit numbers, Minnesota homebuilders had their second-best year in a decade. But, those numbers seem more disappointing coming off 2017, which was the best year for new housing construction since the Great Recession.

Minnesota single-family permits were down 3 percent year-to-date through October, but according to the Minneapolis Area Association of REALTORS (MAAR), new construction pending sales through October were up 7.8 percent.

While some indicators point to the existing housing market shifting from a seller’s to a buyer’s market, the inventory of homes for sale is still at record lows. Therefore, prices continue to rise, homes are selling in less time and sellers are yielding a higher share of their list price.

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Governor’s Task Force Report: More New Housing Needed

The Governor’s Task Force on Housing Affordability released its report titled “More Places to Call Home: Investing in Minnesota’s Future” on Aug. 21. Leading the recommendations included in the report is a call to build 300,000 new homes by 2030, create a regulatory review panel and address the industry- wide labor crisis.

“The Governor’s Task Force on Housing took an important first step in identifying the shortage of new housing production, our need to evaluate regulations, and the construction labor shortage which threatens our ability to solve our housing affordability crisis,” said David Siegel, executive director of Housing First Minnesota. “We are especially pleased with the emphasis to support and strengthen homeownership. “Throughout the Task Force process, Housing First Minnesota advocated for solving our housing supply challenges by increasing affordability across the housing market.

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“We are pleased to see the Task Force embrace the core of this approach, which begins with evaluating regulations and land policies to directly address affordability. “The hard work of addressing the cost drivers impacting housing affordability now enters a new phase. As the leading voice for homebuilding and remodeling, Housing First Minnesota is pleased to see other stakeholders ready to join us in addressing this critical challenge facing all Minnesotans.”

Housing First Minnesota staff attended meetings of the task force and homeownership work group during the first half of the year and sent a letter to the task force in June, saying that addressing Minnesota’s low housing inventory is critical to solving the housing affordability crisis.