VOL. 8 ISSUE 2, JUN. 2024
THE MINNESOTA HOUSING INDUSTRY NEWS SOURCE BY HOUSING FIRST MINNESOTA • HOUSINGINDUSTRYNEWS.ORG
US Supreme Court hands down landmark ruling on impact fees El Dorado County landowner George Sheetz secured a legal triumph from the Supreme Court in April. This ruling comes after months of challenging an impact fee he argued was unconstitutional. In 2016, Sheetz bought a parcel of land where he hoped to place a manufactured home. Before Sheetz could get a building permit, the county conditioned approval of the permit on the payment of a $23,000 traffic impact fee. Sheetz sued, arguing the imposition of the fee sidestepped the Constitution’s Fifth Amendment clause and the Nollan-Dolan standard, requiring a connection to the impact (Nollan) and the fee being roughly proportionality (Dolan). Sheetz v. El Dorado County examined whether legislative or administrative actions tied to land use permitting are exempt from the Takings Clause of the US Constitution’s Fifth Amendment. In April, the U.S. Supreme Court ruled 9-0 for Sheetz, reversing an earlier California Court of Appeals ruling. “Holding building permits hostage in exchange for excessive development fees is obviously extortion,” said Paul Beard, partner at Pierson Ferdinand, who represented Sheetz. “We are thrilled that the Court agreed and put a stop to a blatant attempt to skirt the Fifth Amendment’s prohibition against taking private property without just compensation.” Following Sheetz, any impact fee, even those enacted as part of a fee schedule, must follow the standards of “essential nexus” and “rough proportionality,” otherwise it may be viewed as a regulatory taking. “In sum, there is no basis for affording property rights less protection in the hands of legislators than administrators. The Takings Clause CONTINUED >> PAGE 6
INSIDE THIS ISSUE
Industry gathers to advocate for homeownership opportunities PAGE 8
Mortgage rates level off, market activity picks up PAGE 12
This session, the industry was successful in defending against an array of issues at the Capitol, and the foundation for land use reforms was laid for next year’s legislative session.
Minnesota homebuilders continue to lead the nation in energy efficiency PAGE 16
Legislature shelves housing supply bills Despite support from a diverse coalition, legislation was unable to get across the finish line. The “Minnesotans for More Homes Initiative” was unveiled in February with the support of a bipartisan group of legislators and more than two dozen organizations, with the goal of expanding housing choices while encouraging more environmentally efficient, affordable and attainable housing options. The agenda made housing supply a prominent topic of discussion throughout the legislative session. Numerous bills authored by both Republican and Democratic legislators were heard in both chambers, but two bills garnered the most attention. SF 3964/HF 4009 was deemed the “Missing Middle” bill allowing for a variety of new housing options and more density in all areas of the state. The bill drew the ire of many city lobbying organizations including the Coalition of Greater Minnesota Cities who opposed the language citing, “unreasonable minimum lot sizes to support legislatively
mandated density requirements” and claiming that the language “does not guarantee actual affordable housing is built.” However, there was also support for the language from city council members and mayors throughout the state. “Minnesotans work hard and shouldn’t have to make the choice between moving or having their entire paycheck go towards housing,” said Aaron Wagner, councilmember from Robbinsdale. “Some people don’t even have that choice and are forced to leave their community when it becomes too expensive to live there. We need statewide rules that increase the amount of affordable housing throughout Minnesota.” Cristen Incitti, president & CEO of Habitat for Humanity Minnesota, supported the language. “The Missing Middle bill’s aim to diversify the types of housing developers can build in our communities is critical to
a healthy housing continuum. We need a diverse housing stock that addresses the needs of communities across the entire continuum,” said Incitti. Additionally, SF 3980/HF 4010 would have established multifamily residential development requirements within commercially zoned areas of cities. This language was considered in the mix for the longest duration and had the support of numerous mayors, council members and organizations across the political spectrum. “Given the scope of Minnesota’s housing shortage, this is a critical piece of the puzzle that will enable communities to address their housing challenges,” said St. Cloud Mayor Dave Kleis. “The scale of this shortage requires state action like HF 4010.” Libby Murphy, director of policy for the Minnesota Housing Partnership, testified in a legislative committee saying, “Many of today’s CONTINUED >> PAGE 10
Historic fundraising campaign fuels housing initiative for veterans experiencing homelessness The Housing First Minnesota Foundation and Lennar are taking a significant step toward ending veteran homelessness with the announcement of a Veteran Village project. According to the CONTINUED >> PAGE 18
HOUSING INDUSTRY NEWS
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