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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A new era for housing policy

A new era for housing policy

As we move through the second quarter of 2019, it’s becoming clear that a new era in housing policy is upon us. Nationally, major institutions like Freddie Mac, HUD and the Brookings Institute are leading a conversation that highlights affordability, restrictive zoning and housing supply as mainstream policy priorities for all levels of government to address. States like California are battling the housing crises with legal actions forcing local governments to adjust their rules. Furthermore, California’s legislature is debating a major legislative initiative that would upend elements of local zoning control.

Here in Minnesota, the Legislature took a major step forward with the creation of the Legislative Commission on Housing Affordability. Additionally, the Minnesota Senate created the Select Committee on Homeownership Affordability and Availability.

This constellation of movements in the housing policy space is more than a consensus that a problem exists; it’s the clearest indication yet that our state is entering a new era in housing policy.

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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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A new day for housing affordability

A new day for housing affordability

Gov. Walz signs Legislative Commission on Housing Affordability, Senate Establishes Select Committee on Homeownership Affordability and Availability

The Minnesota Legislature punctuated the 2019 legislative session by creating two forums focused on housing affordability and homeownership access. Gov. Walz signed the bill creating the Legislative Commission on Housing Affordability, which was joined by the Minnesota Senate’s creation of the Select Committee on Homeownership Affordability and Availability. Both entities will seat their respective members and begin work this summer.

The creation of these bodies comes at a time when the region’s housing ecosystem is experiencing a myriad of structural challenges. The chronic lack of supply of available homes for sale, dearth of affordable options and overall inability for the housing industry to construct affordably priced homes, highlight the many roadblocks impacting the market.

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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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Consensus on the Affordability Crisis

Consensus on the Affordability Crisis

2019 is off to a steady start for the first few months of home construction activity. Given our adventures with the weather, steady may be acceptable for now, though we know we need to be building more homes. This isn’t just the homebuilder wanting to build more homes, a growing consensus of public and private institutions have come to this same conclusion: our housing market is broken and we need a surge in new, affordably priced homes.

The Housing Affordability Institute provided a remarkable look at one of the reasons our housing market is suffering, our homes are simply too expensive for many Minnesotans. In Priced Out: The True Cost of Minnesota’s Broken Housing Market, we get to see what impacts the cost of new homes and the challenges this presents for many Minnesota families.

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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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