91 cities come out against bill that would allow more housing density across Minnesota

By: - March 22, 2022 8:01 am

An aerial view of Cottage Grove circa 1959. Courtesy of the Minnesota Historical Society.

Ninety-one city councils across Minnesota have formally voiced their opposition to a bipartisan bill that supporters say will bring down the cost of housing construction by overriding local zoning restrictions.

The League of Minnesota Cities, a trade group for cities, created a template resolution for cities to pass declaring they “oppose legislation that restricts the ability for local elected officials to respond to the needs of their communities.”

The opposition from a wide swath of cities presents a major challenge to Rep. Steve Elkins, DFL-Bloomington, who authored what he’s calling the “Legalizing Affordable Housing Act.

His bill (HF 3256) would discard strict zoning rules like requiring a minimum of a quarter acre lot or more for a single family home, which suburban cities have used to create upscale communities leading to extreme wealth and racial segregation.

Cities in the Twin Cities metropolitan area would not be allowed to mandate a minimum lot size larger than an eighth of an acre, about the size of the typical lot in Minneapolis and St. Paul. The bill would also allow up to two housing units on any lot and block cities from mandating minimum home sizes and from requiring certain building materials for aesthetic reasons.

But metro area city leaders point out they already zone some land for denser housing and the bill doesn’t force developers to build homes that are affordable.

Jason Wedel, city manager for Prior Lake, told state lawmakers on March 15 that the city has allowed developers to build some homes on smaller sized lots, but they are far from affordable to most Minnesotans.

He noted seven of eight Prior Lake homes showcased in the Parade of Homes this month are on small lots. The cheapest is $580,000 and the most expensive is $1.3 million.

“The small lots did nothing toward the goal of creating more affordable housing,” Wedel said. “As a city, we receive no requests from developers to build entry-level homes because they continue to be very successful at selling homes in this price range.”

The cities that have passed identical League of Cities resolutions range from Twin Cities suburbs Anoka, Edina and South St. Paul to small rural towns such as Amboy, Forada and Cass Lake.

Elkins pitched the bill as a kind of grand bargain between cities and developers — who are often at odds over fees and zoning — in order to streamline construction.

Cities would give up some zoning rights, but in exchange be allowed to charge builders directly for the cost of new public services for developments such as roads, sewer connections, schools and police stations.

Under current state law, cities are only allowed to charge developers directly for the cost of reviewing plans and inspecting developments, which can force cities to raise taxes on existing residents.

While the bill has the enthusiastic support of home builders and some bipartisan buy-in — including a Republican Senate author — it’s also facing bipartisan resistance. Some Democrats see it as a giveaway to for-profit builders, while some Republicans are wary of the new fee structure.

Local government leaders are providing the strongest opposition. They stand to lose the authority to decide what gets built where.

Elkins called the League of Cities’ campaign against his bill “disingenuous.”

He says the Legislature gives cities their zoning authority and notes the state has not undertaken a comprehensive review of local zoning since the mid-90s.

“There are gross abuses that have crept into the process,” Elkins said. “It’s time for us to go back and revisit those reforms and update them.”

The bill also takes aim at “planned unit developments.” That’s when developers want to build something that doesn’t comply with local zoning rules.

The process is supposed to allow for innovation in new developments, but home builders say many cities have such stringent zoning policies that they’re forced to negotiate a “planned unit development” for virtually every project. The result, they say, is burdensome, costly and coercive.

Some city leaders have grown to love the process because it gives them power to negotiate higher fees to defray the costs of new infrastructure and it gives them a voice in virtually every aspect of a development’s design.

The League of Cities resolution also declares support for “full housing spectrum solutions,” a reference to a tax-and-spend package drafted by the League of Cities and carried by Rep. Alice Hausman, DFL-Falcon Heights, that would pump about $570 million into the housing market.

The lion’s share of the “Comprehensive Housing Spectrum Act” — $400 million — would be in the form of housing infrastructure bonds, in which the state lends money to affordable housing developers.

The bill would also allow cities to impose taxes on mortgage registry and deeds. The proceeds would be channeled to a special fund but would not have to be spent on affordable housing.

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Previously, he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.