Housing Industry News Vol. 4 Issue 1 - February 2020 by Housing First Minnesota

VOL. 4 ISSUE 1, FEB. 2020

THE MINNESOTA HOUSING INDUSTRY NEWS SOURCE BY HOUSING FIRST MINNESOTA • HOUSINGINDUSTRYNEWS.ORG

As the debate over how to fix Minnesota’s housing issues heats up, the problem becomes more urgent.

The great housing debate expected in 2020 session With several Minnesota lawmakers already stating that housing will be a top issue during this year’s legislative session and housing issues heating up at the local level of government, it’s clear the growing national conversation over housing affordability will blanket Minnesota in 2020. “The statewide housing conversation will really elevate in 2020,” said David Siegel, executive director of Housing First Minnesota. “It’s time—the urgency of the problem is no longer debated.” Industry calls for action have focused on the affordability challenges facing buyers at all levels, as well as the inventory challenges, which according to U.S. Census figures in Minnesota, are the worst in the nation. This major policy discussion in Minnesota will join the surge of housing affordability debates across the country in states like California, Nebraska and Virginia. In California, housing has become a toptier issue, and Minnesota industry leaders

believe that issues and solutions raised there can provide a road map of what is to come in Minnesota. “When we look across the country, we see a pattern focused on lifting affordability roadblocks that are holding back the housing market and limiting homeownership access,” said James Vagle, vice president of advocacy at Housing First Minnesota. While there is often consistency in approaches to fix housing, there are also common challenges in the effort to advance housing legislation. Solutions that propose needed changes have been met with strong opposition. “The challenge in fixing housing is complex; it will require substantial compromise from all sides. The depth of the problem requires this,” added Vagle. Several areas of housing will draw debate in 2020. Clearly, funding is one. “I know that there will be a big push to include a substantial amount of funding for affordable housing in the

bonding bill this year,” said Rep. Steve Elkins (DFL-Bloomington). Gov. Tim Walz included $276 million in his opening bonding proposal, which represents a substantial increase in housing funding when compared to historic investments. While the figure is noted for its increase, some legislators would like to see even more. The bonding proposals will be the centerpiece of the legislative session and are expected to be packaged into a large omnibus bill as the session concludes sometime in May. On the policy front, legislative leaders have pegged housing policy changes as a priority. Sen. Rich Draheim (R-Madison Lake) as chair of the Senate Select Committee on Homeownership has housing as one of his priorities. “This session I’ll be looking to hold down, if not lower, the cost of homeownership,” said Draheim. “There are so many CONTINUED >> PAGE 6

INSIDE THIS ISSUE

Balancing new development, a city council member’s perspective PAGE 5

Years of underbuilding have set the stage for needed action PAGE 9

Students showcase their skills PAGE 13

Dayton impact fees ruled “illegal, null, void and unenforceable” Housing First Minnesota v. City of Dayton is latest victory for homeowners The city of Dayton’s off-site impact fees, known as “off-site transportation charges,” were declared “illegal, null, void and unenforceable” by Hennepin County District Judge Susan Robiner last month

in Housing First Minnesota v. City of Dayton. In the decision granting summary judgment to Housing First Minnesota, Robiner permanently barred the city of Dayton from enforcing its city ordinances CONTINUED >> PAGE 4

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PRESIDENT’S NOTE

2020: Ready for a big year

Gary Kraemer 2020 President, Housing First Minnesota

As we move into 2020 there are many questions lingering over the housing industry, including affordability, inventory, the economy and next fall’s elections. But there is no question that 2020 is setting up to be a consequential year for housing nationally and here in Minnesota. Housing First Minnesota convened an event

in late January that brought together perspectives from homebuilding, development, real estate professionals and multifamily housing experts. These were coupled with a bipartisan legislative panel of dedicated legislators who are working on housing policy issues. The discussion was interesting with multiple perspectives reflecting all angles of housing. What stuck out to me most though, was that there was no debate that we have a big problem in housing when it comes to affordability and inventory of homes for Minnesotans looking to buy. There was no debate: we need to build more homes at affordable price points. I’ve built homes across all price points for over four decades, and I’ve seen many highs and lows in the housing market. What is unique about this moment, is that we are stuck in a loop where we need to build affordably priced homes to free up market supply, but we simply can’t build homes

M I N N E S O T A

at those price points. This leaves our housing market stuck and raises rents and prices for so many who want to live the American dream of homeownership. It was encouraging that our legislative leaders all agreed with this basic assessment of the problem—we need more homes and we can’t build them under the current set of circumstances. Of course, it will be challenging to find solutions and make the necessary changes to free up the housing market. But identifying the problem and taking the early steps to fix it is an important start. 2020 will be a critical year for housing. I look forward to joining all stakeholders as these issues are debated and to finding solutions that grow homeownership opportunities for all. Onward,

HOUSING INDUSTRY NEWS February 2020, Volume 4, Issue 1 PUBLISHER David Siegel David@HousingFirstMN.org EDITOR Katie Elfstrom Katie@HousingFirstMN.org GRAPHIC DESIGN Clare Buche ACCOUNTING Janice Meyer ADVERTISING SALES Brad Meewes Kori Meewes CONTRIBUTING WRITERS Katie Elfstrom Katie@HousingFirstMN.org

Gary Kraemer

Nick Erickson

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Mark Foster

Mark@HousingFirstMN.org

Kristen Ober Kristen@HousingFirstMN.org

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David Siegel

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James Vagle

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Housing First Minnesota David Siegel, Executive Director Gary Kraemer, President

News Tips Have an idea for a story for our next issue? Contact Editor Katie Elfstrom at Katie@HousingFirstMN.org or send your story to Info@HousingIndustryNews.com

Be a part of the growing housing movement in Minnesota. Twitter: Follow us @HousingFirstMN Facebook: Facebook.com/HousingFirstMinnesota

Housing Industry News is a publication of Housing First Minnesota. Housing Industry News is published and distributed six times per year to housing industry professionals and others associated with the homebuilding industry. Neither the advertisers, nor Housing First Minnesota, will be responsible or liable for misinformation, misprints, typographical errors, etc., herein contained. For address change information, contact Housing First Minnesota. Suggestions, ideas and letters are welcome. HOUSING INDUSTRY NEWS 2960 Centre Pointe Drive Roseville, MN 55113 info@housingfirstmn.org www.HousingFirstMN.org Housing Industry News is published by Housing First Minnesota Entire contents copyright 2020 All rights reserved

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Housing First Minnesota is dedicated to advancing the American dream of homeownership for Minnesotans and is the leading resource for housing-related issues in Minnesota. This advocacy work has never been more important. The housing industry remains under intense regulatory and political pressures that impact Minnesota homeowners’ ability to buy, build, and remodel their dream home. Housing First Minnesota supports reasonable policies, regulations and protections, but our call for affordability for families is a voice that must be heard. Learn more at HousingFirstMN.org.

W W W . T I L E S H O P . C O M

THE HOUSING BEAT

Across the country, there is much talk about housing HERE ARE SOME OF THE LATEST QUOTES ON THE STATE OF THE INDUSTRY:

But in more places than not, government zoning restrictions limit increases to density (to say nothing of fees and codes and regulatory costs that drive up housing prices).”

Simply put, new home starts are not keeping pace with demand. Homebuilders have a mountain of opportunity, but a big hill to climb.” JAVIER VIVAS DIRECTOR OF ECONOMIC RESEARCH AT REALTOR.COM

DJ TICE STAR TRIBUNE

As I’ve also said before, what is racist is the overregulation of housing production because that makes all housing scarce and therefore expensive.”

Long approval processes, onerous regulations and the ease of halting construction with various legal objections drive up housing construction costs, making it hard to build affordable housing and contributing to spiraling rents and homelessness.” NOAH SMITH BLOOMBERG OPINION

ROGER VALDEZ FORBES

State and local policymakers across the U.S. are grappling with how to make housing more affordable ... Making the development process simpler, shorter and more transparent would be a good start.” JENNY SCHUETZ BROOKINGS INSTITUTE

Soaring construction costs have been driven in part by a rise in local government fees and stiffer local zoning restrictions.” THE WASHINGTON POST

It’s vital that communities do not neglect single-family construction, notably entry-level, for-sale singlefamily housing that serves as a steppingstone to homeownership.” ROBERT DIETZ NAHB

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REGULATORY AFFAIRS

Regulatory affairs update: 2020 a year of change, proposals 2020 will be a year of change for the housing industry. From the new State Building Codes, updated versions of the Plumbing and Electrical Codes and other proposed rulemaking initiatives, 2020 is poised to bring changes from multiple state agencies. Building Codes The State Building Codes have been adopted as presented and are set to go into effect on March 31. Adoption of the 2018 model International Residential Code (IRC) includes several Minnesota-specific amendments: • New and existing basements do not need egress windows if the basement and exit floor are completely sprinkled. No egress window is required in older basements undergoing renovations if no bedroom is present. • Homes undergoing alterations do not need hardwired, interconnected smoke alarms or carbon monoxide alarms if the area undergoing renovations does not result in the removal of an interior wall, ceiling finish, and if there is no attic access. Hardwired devices are not needed in the attic or crawl space without removal of interior finish. • Photovoltaic systems (solar systems) adopted 2018 IRC language without amendment for roof access, emergency egress pathway, smoke ventilation, eave/ridge lines on attached structures. There is no indication at the time of printing that a new Residential Energy Code will be adopted in 2020. Members of the Legislature have indicated they may intervene if the Department of Labor and Industry seeks a more costly Energy Code. RRP / Lead Paint The Minnesota Department of Health has cleared a major hurdle in taking state custody of the federal Lead Renovation, Repair and Paint (RRP) rule from the Environmental Protection Agency (EPA). After months of review, the EPA has said the state’s enforcement program meets the standards of the EPA. There are some additional steps in the process before the rule becomes law, which include releasing a public version of the draft rule. The last publicly available version of the Minnesota RRP Rule was released in spring 2019. Initial versions of the Minnesota rule were found to dramatically increase the cost of remodeling pre-1978 homes in Minnesota. A coalition of housing organizations, which included Housing First Minnesota and the Minnesota REALTORS, worked to reduce the cost of the proposed Minnesota RRP Rule, and the latest version is much more palatable.

Opinion: Another city’s attempt to collect illegal transportation fees struck down by the court

Changes to electric code could cost new-home buyers.

Plumbing Code The Minnesota Board of Plumbing began working through proposed changes to the Minnesota Plumbing Code at its January meeting and will continue to work through changes in the next several months. Last year, the Board’s Ad Hoc Rulemaking Committee recommended removing the dishwasher air gap mandate from the plumbing code in its next update. Housing First Minnesota concurs and continues to seek its removal. Electric Code Changes to the Minnesota Electrical Code may cost new-home buyers $1,000-2,000, according to homebuilders. There is growing concern from the housing industry over increasing mandates in the Electrical Code. Builders and appliance subcontractors report increasing complaints from buyers about everyday usage of common electronic devices tripping circuit breakers. Clean Cars In January, the Minnesota Pollution Control Agency (MPCA) released a report on comments received on proposed rules governing vehicle emissions. A 2019 report from the MPCA indicated Minnesota may look at adopting new vehicle standards. In its comments, Housing First Minnesota said that any mandates to make new homes electric-car ready must go through the Minnesota Department of Labor and Industry. The MPCA is expected to formally begin the rulemaking process in March. Construction and Demolition Waste In addition to the Clean Car rulemaking, the MPCA has two active projects that could impact processes and costs related to construction and demolition waste. The Rule Advisory Panel is examining potential changes to the rules governing construction demolition landfills. The Sustainable Building Group is examining potential recycling and reuse options to keep construction and demolition waste from entering landfills.

atorium on development so that it The development community could “study and respond” to the has long maintained that the practice of cities exacting transportation Harstad decision. After a 10-month development moratorium, Dayton fees or charges from developers as a announced plans to resurrect its condition of development approval is illegal, but the issue had not transportation fee practice pursuant to a new policy and procedure been directly and fully addressed by the courts until the Minnesota that required developers to pay an Supreme Court handed down its “off-site transportation charge” in decision in Harstad v. City of Wood- one of two forms—either a “Project Specific Transportation Charge” or bury in August 2018. The supreme a “General Transportation Fee.” court confirmed that cities have no Dayton, before it adopted its legal authority to impose transporrepackaged and relatation (also called “inbeled transportation frastructure” or “imDayton admitted its fee, was on notice pact”) fees or charges transportation fee from the building and that this practice development is illegal and unen- was illegal, removed and the fee from its community that its forceable. Despite the fee schedule transportation fee Supreme Court’s unand enacted a policy and ordinance ambiguous holding, was illegal and would and over the objecmoratorium on be challenged in tions of builders and development. court. The city igdevelopers, including nored these warnings consumer advocacy group Housing First Minnesota, and adopted its rebranded transthe city of Dayton enacted an “off- portation fee in July 2019. Housing First Minnesota chalsite transportation charge” requiring developers to pay these banned lenged Dayton’s transportation fee fees. Late last year, this practice in court. The Hennepin County was (again) declared illegal and District Court, citing the recent unenforceable when the Hennepin Harstad decision, struck down the city’s charge and the associated County District Court struck down policy, procedures and ordinances Dayton’s fee. to implement the fee as “illegal, Dayton, a northwest Twin Cities suburb, was one of several Minne- null, void and unenforceable” and permanently enjoined the city from sota cities collecting transportation enforcing its transportation fee. fees from developers when the This is now the fourth court (inHarstad decision was issued. In recluding the district court and apsponse to the Harstad ruling, Daypellate courts in Harstad) to reject ton admitted its transportation fee a city’s attempt to impose transwas illegal, removed the fee from portation fees. We fully anticipate, its fee schedule and enacted a morshould there be future attempts to enact such fees, that they will meet a similar fate. Rob Stefonowicz is an attorney with Larkin Hoffman. Stefonowicz was the attorney for Housing First Minnesota in its lawsuit against the City of Dayton and represented Martin Harstad in Harstad v. Woodbury.

CONTINUED FROM PAGE 1

Dayton impact fees ruled “illegal, null, void and unenforceable” requiring payment of an off-site charge as a condition of project approval. “This is a victory for homebuyers in the city of Dayton,” said David Siegel, executive director of Housing First Minnesota. “We are pleased that the court's judgment was in line with previous rulings on this issue. Cities have multiple options to fund street improvements and it’s important to note that developments already pay for all infrastructure related to the project. Attempting to require an illegal tax on new homeowners creates an unnecessary barrier to homeownership for Minnesota families.” At issue in the case was the city of Dayton’s off-site transportation charge. Under this charge, developers were forced to pay an

HOUSING INDUSTRY NEWS

off-site transportation fee to the city for offsite traffic improvements, or to enter into a traffic study and pay a fee determined by the traffic study. The standard fee was several thousand dollars per new home. In its court filings and at the November hearing, the city of Dayton argued that its transportation charge was not a fee, but a voluntary form of financial security, therefore not applicable to the Harstad v. Woodbury ruling. Housing First Minnesota argued that the charge was not voluntary, as there was no way to avoid paying an off-site charge to the city, nor was the charge a form of financial surety as there was no intent to return this charge. In her opinion, Robiner agreed with

Housing First Minnesota, writing that there was “no evidence that these payments are optional or voluntary, when a developer must choose one of the two options both of which require some type of payment before obtaining approval. And even though the city may give developers the opportunity to only pay for their proportional share of the improvements, both options make payment mandatory for approval and do not allow for a return of funds for the developers” as is required under state law. The city of Dayton initially enacted its offsite transportation charge in late July 2019. Prior to the adoption of the ordinance, Housing First Minnesota sent a letter to Dayton Mayor Tim McNeil, stating it believed the policy to be a violation of state law, asking for

its removal and indicating it could invite a legal challenge. In August, Housing First Minnesota filed suit against the city of Dayton, seeking summary judgment and an injunction against the fee. Robiner heard the case in early November. January’s ruling is the fourth consecutive court decision against off-site impact fees since the late 2016 district court ruling in Harstad v. Woodbury. The city of Prior Lake is the only other city with a similar program in Minnesota. At the time of printing, the city of Dayton hasn’t indicated if it will appeal the ruling.

Editor’s Note: The plaintiff in the case, Housing First Minnesota, is the publisher of Housing Industry News.

Trump administration announces waters rule replacement Navigable Waters Protection Rule announced at the International Builders’ Show Rochester proposing new tree canopy mandate.

Tree requirements casting canopy beyond Twin Cities

Land developers and farmers who have long opposed the WOTUS rule celebrated the changes.

Andrew Wheeler, acting administrator of the Environmental Protection Agency (EPA), announced the successor to the Waters of the United States (WOTUS) Rule at the International Builders’ Show in January. The new rule, dubbed the Navigable Waters Protection Rule, redefines which waters are subject to the Clean Water Act, removing many questionable wetlands and streams that were subject under WOTUS. “After decades of landowners relying on expensive attorneys to determine what water on their land may or may not fall under federal regulations, our new Navigable Waters Protection Rule strikes the proper balance between Washington and the states in managing land and water resources while protecting our nation’s navigable waters, and it does so within the authority Congress provided,” Wheeler said in a statement. Announcing the new rule at the International Builders’ Show underscored the effect the WOTUS rule had on the housing industry. Enacted in 2015 under former President Barack Obama, the WOTUS rule gave the Army Corps of Engineers expanded oversight of streams and wetlands as part of the Clean Water Act. In September 2019, President Donald Trump announced the repeal of the WOTUS rule. One of the more contentious aspects of the WOTUS rule was the definition of “adjacent waters.” Under that rule, streams and wetlands not previously subject to the Clean

Water Act became subject to federal oversight. The WOTUS rule had been the repeated subject of lawsuits, which left it in varying states of enforcement throughout the U.S. before its repeal. Land developers and farmers, groups that have long opposed the WOTUS rule, celebrated the change in direction. “Excluding most man-made ditches and isolated ponds on private property from federal jurisdiction, the new rule will correct the vast overreach of prior rules, restore common sense to the regulatory process, reduce project costs and maintain environmental protection of our nation’s waterways,” said National Association of Home Builders Chairman Greg Ugalde. At the American Farm Bureau convention in January, Trump said, “[WOTUS] was a rule that basically took your property away from you.” He added the new rule will “allow states to manage their water resources based on their own needs and what their farmers and ranchers want.” Not everyone is pleased with the announcement. Environmental groups condemned the Trump administration’s actions as weakening environmental protections. “We will do all we can to fight this attack on clean water. We will not let it stand,” said Gina McCarthy, president and CEO of the National Resources Defense Council. The Navigable Waters Protection Rule has only been proposed and must still work through the rulemaking process.

Tree mandates on new developments are not uncommon in the Twin Cities area, but rare outside of the 13-county metro area. That could change under a proposal from the city of Rochester, which is considering enacting its own tree canopy mandates on new developments. The preliminary tree ordinance is in response to a report from the Society of American Foresters that the city is currently under the ideal tree canopy cover percentage at 27%. Under the proposal, Rochester’s tree coverage would change to somewhere between 40-60%. Under the Rochester Committee on Urban Design and Environment’s proposal, developments would be required to meet a minimum of 40% tree canopy cover based on the projected canopy cover of the trees at maturity. Preservation of existing trees on the lot will contribute to the 40% minimum. If a development site has a canopy cover of greater than 40% pre-development, tree removal will be approved so long as the 40% canopy cover is maintained throughout the development process. The preliminary proposal did not outline the retention of these trees or their replacement, meaning the proposal would only be applicable to new developments. The approach taken by Rochester is slightly different than in the Twin Cities, where cities tend to mandate a 1:1 replacement of the caliper inches of the trees and often do not factor in trees at maturity. Residential developers know the importance of planting trees, as they are an amenity supported by buyers and bring positive environmental impacts. However, developers report that cities often require more trees to be replanted than is possible on the site, forcing the new-home buyers to pay high fees in lieu of meeting the tree mandate.

Balancing new development, a city council member’s perspective Q&A with Oakdale City Council Member Kevin Zabel

Elected in 2016, Kevin Zabel is in his first term as a council member on the Oakdale City Council. Q: How does new residential construction and remodeling benefit your community?

A: Naturally, any reinvestment in our community, either through

remodeling or new development, provides a financial boost via an additional tax base. Oakdale is one of the more financially prudent communities in the east metro, particularly when it comes to property tax levies, and so having additional tax base on underdeveloped land will help us to continue providing the services our residents know and value in a financially responsible manner. In addition to the financial benefit, we have seen activity, such as development and redevelopment, provide a noticeable boost to resident pride in our community, as well as inspiration for possible improvements to be made on other properties—a snowball effect if you will. Whether it is a new development on a once-vacant

lot or simply a “facelift” to an older property, our residents appreciate new and visually appealing additions to our community. Q: Oakdale is about to start one of the largest new developments that the inner-ring suburbs have seen in years. How do you envision the city evolves as this comes to fruition?

A: The population growth associated with the two major development projects in Oakdale will inevitably force Oakdale to reevaluate a lot of the current processes in place. Between the Willowbrooke development, as well as the transit-oriented development associated with the Gold Line BRT, some conservative estimates have suggested

Oakdale’s population could grow by as much as 30%. As those new residents come in, we will have to reevaluate spending within our parks program, to ensure park amenities are more reflective of the communities they serve. We will also have to reevaluate our public works and public safety strategies, to ensure adequate coverage and efficient responses to existing and new resident needs. Q: As a council member how do you balance the wants and needs of existing residents and the wants and needs of the incoming residents?

A: It can be incredibly difficult, particularly in part due to the uncertainty of who may be moving into

our community in the near future. I believe our city staff does a wonderful job in evaluating the needs of current residents but leaves enough flexibility in our plans to adapt to the inevitable generational changes we will experience. Q: What are you most excited about for the city of Oakdale in the next 5 years?

A: This period of growth we find ourselves in is very exciting, but there are many other opportunities for our region, including finding a lasting solution to the contaminated water crisis that has impacted the east metro for decades, revitalizing our commercial real estate with public and private investment, and expanding our mass transit opportunities to better connect our suburban residents and workers with the metro region as a whole.

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HOUSING ON THE HILL CONTINUED FROM PAGE 1

The great housing debate expected in 2020 session “We need to look at reforming our building codes, zoning, permitting, and fees.” Sen. Rich Draheim R - MADISON LAKE

Housing First Minnesota’s David Siegel testifies in front of Senate Select Committee.

benefits to homeownership that it needs to be the center of our housing discussion this year.” Industry leaders from Housing First Minnesota have identified broad areas of discussion that they anticipate will be part of the 2020 discussion. “The first ask of the legislature is to do no harm to housing. Do not create new

roadblocks to affordability,” said Siegel. “Beyond that, we believe that zoning, permitting efficiency and transparency on housing costs must be discussed and considered in this legislative session.” Siegel indicated that specific proposals are expected in the opening weeks of the session. The focus on addressing the state’s

housing shortage will face a short timeframe. But housing-focused legislators like Rep. Jim Nash (R-Waconia) believe it will be prioritized. “Housing will be a hot topic for conversation this session,” said Nash. “We have to get it right as we work to solve the challenging equation that impacts people’s ability to pursue homeownership and the American dream.” Draheim concluded that homeownership and the rising costs need to be addressed now as it can take years for development to occur. “We need to look at reforming our building codes, zoning, permitting and fees,” he said. “These all add to the costs of homes, and every penny counts when it comes to making the goal of homeownership more attainable.”

Industry comments submitted to Federal Council on Housing Affordability The U.S. Department of Housing and Urban Development (HUD) requested public comment in November 2019 for recommendations to the Department concerning regulations that may unnecessarily impede the ability for the market to provide a healthy supply of new homes. “Owning a home is an essential component of the American dream. It is imperative that we remove regulatory barriers that prevent that dream from becoming a reality,” said HUD Secretary Ben Carson. Carson is the appointed chair of the White House Council on Eliminating Regulatory Barriers to Affordable Housing. The Council was established under Executive Order 13878 signed by President Donald Trump. Housing First Minnesota submitted industry comment that identified Minnesota’s housing affordability and availability challenges and highlighted the regulatory barriers the organization believes the Council should research. According to the U.S. Census, Minnesota has the highest new housing costs in the Midwest and the worst housing inventory

in the nation. The state’s racial equity gap for homeownership is one of the highest in the nation. Included in its comments, Housing First Minnesota highlighted single-source water permitting, a true performance path energy code and direct state adoption of the EPA’s Lead Renovation, Repair and Paint Rule as areas the Council should investigate. Aside from areas where the federal government can directly intervene, Housing First Minnesota highlighted other topics for consideration, including zoning and land use, impact fees and the importance of approval timing in states like Minnesota. The group concluded with an assessment of the housing landscape, noting that the housing affordability problems in the U.S. are complex and there is no single solution, however, there is unprecedented consensus across the nation to reduce regulatory costs of housing. The Federal Council on Housing Affordability is expected to review and incorporate these and other comments into a plan later in 2020.

State’s top court clarifies multifamily warranty start date A January ruling from the Minnesota Supreme Court has brought clarification to the start date for Minnesota’s statuary warranties on new multifamily housing units. In Village Lofts at St. Anthony Falls Association v. Housing Partners III-Lofts LLC et al, the Court ruled that the home warranty law goes into effect at the sale of the first unit in for-ownership multifamily projects. As some multifamily projects can take years for the sales to complete, the ruling has settled whether multifamily complexes have a single warranty date, or if each unit has its own date. This clarification, which applies to condos and townhomes, is the result of a multiyear battle over Village Lofts, a two-building condominium in Minneapolis. In January 2014, a water leak was discovered in Building A, which was caused by a broken pipe in the building’s HVAC system. In June 2015, a similar issue was discovered in Building B leading Village Lofts at St. Anthony Falls to file suit with developer Housing Partners and general contractor Kraus-Anderson in August 2015. Village Lofts Building A was granted a partial certificate of occupancy in September 2002, with the first unit sold in October of that year. A certificate of occupancy was issued for the entire building, less two final units, in November 2003. Building B, a halfblock away from Building A, was started in 2004 and sales of units in that continued for more than a year. Hennepin County District Court said that the 10-year warranty window had expired before either Housing Partners or Kraus-Anderson were notified of any defects and the case was dismissed. Village Lofts appealed and the Minnesota Court of Appeals upheld part of the district court’s ruling but sent the warranty date issue back to district court. The Supreme Court ruled that the District Court ruling had properly dismissed the case. January’s State Supreme Court decision follows 2017 reforms to the Minnesota Common Interest Community Act advanced by Housing First Minnesota and a coalition of partners, which require homeowner’s associations with common interest property to prepare and follow a preventative maintenance plan and receive approval from a majority of owners before launching a warranty claim. The 2017 law change has been cited by multifamily developers as helping to spur the recent surge in multifamily projects.

Minnesota legislators make push for $1 billion rent subsidy plan Minnesota’s housing crisis is being felt across all sectors of the market. One of these areas is the population of Minnesotans experiencing homelessness across the state. Advocates and legislators announced the proposal in early February during a press conference. Rep. Michael Howard (DFL-Richfield) and Sen. Kari Dziedzic (DFL-Minneapolis) stated that the Christmas Day fire that destroyed a Minneapolis homeless shelter and displaced more than 200 people highlighted the tight market that our state is faced with. “It showed that working people can’t find affordable homes. Providing rent subsidies in this bill is to stabilize families,” said Dziedzic. The legislators, along with the advocacy group Interfaith Housing Collaborative,

HOUSING INDUSTRY NEWS

proposed a $1 billion a year solution that would impact 550,000 Minnesotans. Families and individuals who earn less than 50% of the area median income and also pay more than 30% of their income toward housing costs would qualify for the new subsidy program. Howard acknowledged the cost of this plan is expensive and may experience pushback. “Some will say ‘can we afford this?’ I would argue we can’t afford to maintain the status quo; we need to revise how we address our affordable housing crisis,” stated Howard. The upcoming session of the Legislature is not scheduled to review budget items. However, legislators will use this session to debate how the state should spend a projected $1.3

billion surplus. The legislators will likely present the proposal when session resumes. In response, Sen. Rich Draheim (R-Madison Lake) released a statement acknowledging the housing affordability issues facing Minnesota’s housing market. However, Draheim believes the state needs to “address affordable housing through an all-of-the-above approach that not just focuses on rentals or subsidies, but targets the root cause, which is building more housing units.” Draheim chairs the Senate Select Committee on Homeownership Affordability and Availability to explore solutions to the affordability issues facing all sectors of the housing market. “Ultimately, we want to increase affordable

homeownership in Minnesota, and the more effective way to do this is driving down the cost to create more options,” stated Draheim. This proposal comes with a strong push by Minnesota Democrats to create and fund more affordable housing projects statewide. Gov. Tim Walz has proposed the state borrow an estimated $276 million in bonds to develop new and renovate existing affordable housing projects. TRACK THE CONVERSATION ON TWITTER: @HousingFirstMN #MNHomeownership

Legislators preview 2020 session priorities to fix Minnesota’s housing market Housing experts and legislators looked at the current housing market conditions and discussed ways to address the region’s affordability challenge during the Housing 2020: Session Preview hosted by Housing First Minnesota on Jan. 30. The event featured a unique look at the state’s housing market, with data and analysis related to new construction, existing inventory and multifamily housing from Housing First Minnesota, Minneapolis Area REALTORS® and the Minnesota Multi Housing Association (MHA). “We have the highest new home costs in the Midwest, with the median new home price knocking on the door of $400,000,” said Nick Erickson, director of research and regulatory affairs at Housing First Minnesota. “While we increased our homeownership rate in 2019, it’s not all good news, we also have one of the highest equity gaps in homeownership.” “People are staying in their homes longer. People used to move every five to seven years, now it’s become a game of musical chairs where they are not going to get up from their seat until they have a place to sit down,” said David Arbit, director of research and economics at Minneapolis Area REALTORS.

“Buyers are running into the inventory wall, there just isn’t enough product to fuel this extra demand, especially for first-time buyers. Demand is back to all-time highs, while new homes coming onto the market are still very much suppressed.” Each sector of the housing market reported too few new units available at an affordable price and existing inventory near historic lows. The data shows that more and more Minnesota families are being priced out of the housing market. This is placing pressure on the rental market, limiting move-up options and leaving the region’s housing ecosystem broken. The legislative panel featured Rep. Jim Nash (R-Waconia), Rep. Peter Fischer (DFL-Maplewood), Sen. Kari Dziedzic (DFL-Minneapolis) and Sen. Rich Draheim (R-Madison Lake). This group of elected officials from all four caucuses represent a diverse geographic area and perspective. Each has a background in housing policy and sit on key housing-related legislative committees. “When we look at housing it is so intertwined, the issue with homelessness, multifamily housing and single-family homes,” said Draheim. “I applaud the people in this room for working on one of the key factors, the cost

Rep. Nash, Sen. Dziedzic, Rep. Fischer and Sen. Draheim discuss housing and the upcoming session during the event.

of housing. We need to work together, and we need to make housing a priority.” “I look at this like a quadratic equation and there’s a lot of different integers in order for this to get solved,” said Nash. “This is not about one singular issue that we are addressing, sometimes we are talking about fees or different things, what we’re talking about is that equation that has to get solved and you have to show your work and do it right.” All four panelists agreed that everything must be on the table this legislative session in order to fix the region’s housing affordability problem. “Each community is unique and doesn’t like to be told what they can and cannot do, the problem is collectively we have to figure out the

problem,” said Fischer. “There are communities that are working with developers to say what can we do to help you get a little more density in here, to make it more affordable, but it’s because they are empowered by their city council, and their city council’s been empowered by the people to be able to do that to be a little more creative, and that’s what it eventually comes down to is there are the NIMBYs that say we don’t want it in our backyard.” “I think we need to have everything on the table, and the legislature needs to have a very open discussion on what works,” said Dziedzic. “I want to find a way to help stabilize people and get them in homes.” The Minnesota Legislature resumed on Feb. 11.

HOUSING INDUSTRY NEWS

| 7

MARKET REPORT

Housing market report Strong year-end finish for residential construction

State of Minnesota

New home construction saw a strong finish to 2019. The number of permitted units in 2019 was up 17.5% from 2018. According to the U.S. Census, the statewide number for single-family permits in 2019 amounted to 14,732 new units. Multifamily construction also ended 2019 on a strong note. Multifamily constructed 9,314 new units throughout the state and accounted for 60% of new residential construction in 2019. However, statewide and metro home prices continue to increase, and inventory remains tight for first-time buyers and downsizers.

Moorhead

SOURCE: CITY OF MOORHEAD

14,732

Duluth

Year-to-Date Single-Family Construction Through December 2019 SOURCE: U.S. CENSUS

SOURCE: U.S. CENSUS

St. Cloud

SOURCE: CENTRAL MINNESOTA BUILDERS ASSOCIATION

Twin Cities

9,513

(St. Cloud-Area Data Not Reported to U.S. Census)

Mankato

SOURCE: U.S. CENSUS

Rochester

344

SOURCE: U.S. CENSUS

SOURCE: US CENSUS. HOUSING FIRST MINNESOTA COLLECTED THE ABOVE PERMIT INFORMATION FROM AVAILABLE PUBLIC RESOURCES.

DEC. 2019

$279,000 +8.2%

$252,000

DEC. 2018

+7.3%

$257,900

Y-Y Change

DEC. 2018

$234,950

2018

$234,950

Twin Cities Median Sales Price

Minnesota Median Sales Price

SOURCE: MINNEAPOLIS REALTORS

SOURCE: MINNESOTA REALTORS

Twin Cities Construction Employment Past 5 Months

United States

South - 63

SOURCE: DEED

Midwest - 50

Northeast - 59

Regional Remodeling Market Indicies, 2019 Q4 SOURCE: NAHB

The Overall Remodeling Market Index is calculated by averaging the Current Market Index and the Future Market Indicators Index. Any number over 50 indicates that more remodelers view remodeling market conditions as higher than the previous quarter. Results are seasonally adjusted.

HOUSING INDUSTRY NEWS

SOURCE: DEED

Y-Y Change

$257,900

West - 60

Minnesota Construction Employment Past 5 Months

Employment Update Minnesota added 3,978 jobs on a seasonally adjusted basis since December 2018, a 0.1% increase, according to the Minnesota Department of Employment and Economic Development (DEED). The state’s seasonally adjusted unemployment rate remained steady at the previous month’s rate of 3.3%. Construction saw steep losses in the month of November, down 4,900 jobs, and continued to see shortfalls into December with another 200 jobs lost.

Years of underbuilding have set the stage for needed growth in 2020 Housing affordability reached a new crisis level in 2019 While the economy is expected to slow slightly in 2020, with low mortgage rates and pent-up demand for housing, it’s predicted that housing will continue to see growth throughout the year. According to economists speaking at the International Builders’ Show in Las Vegas in January, housing affordability reached a new crisis level in 2019, and price acceleration is expected for both rent and ownership of existing and new homes. National Association of Home Builder’s chief economist, Dr. Robert Dietz told the Las Vegas crowd the U.S. is now short over a million housing units. While Dietz predicts around 920,000 housing units to be built in 2020, a 4% increase from 2019, he says that number needs to be closer to around 1.1 million units per year to meet the current U.S. demand. “Housing is a ladder and we need all types,” said Dietz. “House price

appreciation is going to accelerate and continue, for the fact, there is simply no inventory.” Frank Nothaft, chief economist at CoreLogic, predicts that U.S. home prices will jump 4.8% and rents to climb 3% compared to 2019. “Some areas will see double that growth, that is a lot higher than the 1.5% inflation,” said Nothaft. The economists point to the roadblocks to building new homes as cause for the fast pace of price growth across the country. “Existing inventory has never been this low. And there is no sign of them picking up. All signs point to housing demand rising,” said David Berson, senior vice president and chief economist at Nationwide Economics. “There is only one way to add housing inventory, newly built and built for rent.” While the labor shortage has certainly added to the price of new construction, the economists’ panel

NAHB Chief Economist Dr. Robert Dietz previews the upcoming housing market during IBS 2020.

“Builders that are able to build entry-level homes, are able to have record years.” Dr. Robert Dietz

CHIEF ECONOMIST, NATIONAL ASSOCIATION OF HOME BUILDERS

agreed that they expect the labor shortage to level out slightly in 2020. Some point to modularization and panelization as a solution to the affordability challenge, but Dietz doesn’t think it will have much of an impact on price. “The share of panelization actually went down in 2019. I think there are

headwinds as far as growing that as part of a solution for the affordability problems,” said Dietz. “Part of the problem is that there is a labor problem in manufacturing as well and then there are the logistics of getting the product out to locations.” Dietz believes part of the solution to building affordably priced homes lies in the hands of local governments. “We need zoning changes to allow for smaller lots so areas with millennials can build entry-level construction. The places that are doing it well are areas where zoning allows for small homes on small

lots. Building with density is going to help,” he said. Dietz noted that the areas of the country that saw the most growth in 2019 were areas that have lower regulatory and zoning barriers. “Builders that are able to build entry-level homes, are able to have record years,” said Dietz. He noted that Oklahoma had a great year building entry-level homes. Southern and mountain states where you see more of that single-family, entry-level product are also areas seeing substantial growth in inventory.

Housing Industry News will continue to follow the story in both its online and print editions.

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HOUSING INDUSTRY NEWS

| 9

MARKET REPORT

High price of housing has costburdened renters on the rise Despite a banner year of multifamily construction, the shortage of affordable rental units continues to drive up the price of rent. According to a recent report by the Join Center for Housing Studies of Harvard University, between 2012 and 2017 the number of units renting for $1,000 a month or more rose by 5 million, while the number of low-cost units, those under $600 a month, fell by 3.1 million. The report reveals that adding to the shortage of lower priced units is the increasing demand from high-income renters. Households of incomes over $75,000 accounted for over three-quarters of the growth in renters from 2010 to 2018. Renting has also become much more common among the households and age groups that traditionally were more likely to be homeowners.

From the homeownership peak in 2004 to 2018, the number of married couples with children that owned homes fell by 2.7 million, while the number renting rose by 680,000. This change now means that families with children now make up a larger share of renters (29%) than homeowner households (26%). The increase in renters with higher incomes and larger households may suggest that there is a shift in preference, but according to the Harvard report, most renters indicated that they still desire to eventually own homes. Their surveys also revealed that affordability was the major barrier holding them back from homeownership. The unprecedented growth in high-income renters and larger households has contributed to the shift in new construction toward larger

REALTORS: Inventory shortage continues to plague the Twin Cities housing market During their annual joint press conference, the Minneapolis Area REALTORS®, the St. Paul Area Association of REALTORS® and the Minnesota REALTORS® once again expressed concerns over the lack of housing inventory in Minnesota. “In our market, like others across the country, lack of housing inventory has been a recurring theme for homebuyers. It continued in 2019, as buyers looking for entry-level options and more affordable choices felt the most pressure,” said Patrick Ruble, president of the St. Paul Area Association of REALTORS. The Twin Cities’ supply of inventory fell from a low of 1.9 months to 1.5 months in December, a 21% drop from 2018. Total inventory of homes for sale dropped from 9,248 in 2018 to 7,431 in 2019, a 19% decrease from last year. According to area REALTORS, the short supply has led to an ultra-competitive environment where multiple offers are commonplace. This is good news for

10 |

HOUSING INDUSTRY NEWS

sellers as they receive strong offers in near-record time. One bright spot in the housing market, rates remain attractive. “The second half of the year saw consistent sales gains, as record prices and declining affordability were offset by favorable rates and wage growth,” said Linda Rogers, president the Minneapolis Area REALTORS. All three groups recognized the need for more newly built homes to help ease inventory constraints and rapid price growth. “Buyers were persistent despite the tight inventory, particularly under $300,000. That’s no surprise, as the Twin Cities is a wonderful place to work and play,” said Rogers. It was no surprise to the REALTORS that prices rose 5.7% in 2019 to a median sales price of $280,000, a record high. Home prices have now risen 86.7% from their lows in 2011 and are now up 26.7% from their prior peak in 2006.

more expensive apartment units. But the Harvard Report also points to the rising costs in housing development as a key factor. According to the report, the price of commercial land doubled between 2012 and mid-2019. The RLB Construction Cost Index which captures the cost of labor, materials, fees and local taxes, also jumped by 39% during this period. “With these steep increases in development costs, it is no surprise that rent for new housing units are so high,” according to the Joint Center for Housing Studies of Harvard. The Harvard Report also points to local regulations as another challenge for affordable rental housing development. “High fees, minimum setback and parking requirements and other restrictions add to the cost of new construction,” according to the report. The report found median impact fees of $12,200 per unit in California and some that reached as high as $24,000 per unit in Oakland.

The Joint Center for Housing Studies shares a report at the Minneapolis Federal Reserve event.

How do we solve such a problem? The Joint Center for Housing Studies of Harvard suggests a comprehensive response from all levels of government to address the scale of the housing affordability crisis. This includes removing obstacles to housing development such as allowing for more density in a wider array of neighborhoods.

Millennials are still reaching for homeownership Despite relentless stories of millennials not wanting to own homes, research continues to show the opposite. A new survey conducted for Wells Fargo shows that a huge majority of U.S. adults (92%) believe buying a home is an investment in their future, and nearly all homeowners (95%) agree owning a house provides more “bang for your buck” than renting in the long run. The survey also showed why some may think millennials don’t want to own homes; nearly half (41%) of millennials believe that buying a home is impossible for them, and the majority (71%) of millennials say they will need to make hard sacrifices in order to own a home. When considering the biggest barriers that prevent them from buying or upgrading a home, respondents of the survey most often said they are constrained by saving for a down payment (27%), paying down consumer debt (22%) and improving their credit score (21%). This was even more pronounced among African Americans and Hispanics, with more than 1 in 3 saying saving for a down payment and their credit score are the biggest barriers to buying a home. The survey also revealed nearly half of U.S. adults (47%) say they are currently saving for a

home project—either a down payment (23%), a home renovation project (21%) and/or a home upgrade (13%). The majority (71%) of millennials who said they were saving for a home project or down payment responded that they have conducted work outside of their primary job to help with saving for a home project.

U.S. adults who believe buying a home is an investment in their future

92%

Nearly half of millennials believe that buying a home is impossible for them

41%

Homebuilding’s slow recovery through the 2010s national trend in the previous decade with the lowest housing production rate in 60 years. In 2018, Minnesota’s Task Force on Housing called for a surge in housing production of all types across Minnesota. The overall goal is 300,000 new units by 2030, with a five-year surge of 10,000 new units annually above 2017’s production level of 22,000 units. However, with a goal of 32,000 new housing units needed in 2019, Minnesota fell short of this baseline. To put the 300,000 by 2030 figure in perspective, the output of the housing industry in terms of new units for 2020-2029 would need to nearly double the output from 2010-2019, and be the highest production decade in history, eclipsing the housing booms of the 1970s and 2000s. As Minnesota and the entire nation struggle to get a handle on inventory issues, home prices will continue to price out potential homebuyers.

14,000

12,000

10,000

Thousands of Starts

The 2010s was the slowest decade for single-family production in the last 60 years. As the number of homebuilders in the market dwindled during and after the economic recession and housing market crash, the U.S. struggled to recover its housing inventory. According to a report from the National Association of Home Builders, the market produced 6.8 million single-family homes from 2010 to 2019, a record low rate since the 1960s. This level was also half of what was produced in the 2000s with 12.3 million units. Additionally, almost 150 million homes were remodeled throughout the last decade with activity in this sector decelerating recently because of slowing of home sales. This market crisis is being felt in local housing markets across the nation. In particular, the Midwest only produced 15% of the 6.8 million units total for the decade. According to the U.S. Census, Minnesota was home to the lowest available housing inventory in the country. Minnesota’s market also reflected the

Minnesota Single-Family Starts by Decade

8,000

6,000

First Source for

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First Source for Quality | Value | Service

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1980s

1990s

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2010s

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| 11

INDUSTRY IN ACTION

2020 International Builders’ Show and the Kitchen and Bath Industry Show in Las Vegas highlight latest industry products and trends.

Trend outlook from 2020 Design and Construction Week Bold colors, more customization and smart home technology that takes the function of your home to the next level were just some of the trends seen at the 2020 International Builders’ Show and the Kitchen and Bath Industry Show in Las Vegas in January. More than 2,000 exhibitors showed off their products at the shows. There was much to be seen in windows and door innovation at the show. Marvin’s new Skycove window seat took home a best in show award and Anderson Windows and Doors showcased their new large curved sliding glass doors. Bold new kitchen cabinet colors and stains were seen across the show floor, but it was the innovative kitchen appliances that really stole the show; from dishwashers that know when they are full and start themselves to stoves that remember your favorite recipes to refrigerators that remind you to pick up more milk.

Here’s what Minnesota industry members had to say about the latest trends seen at the show: “I loved seeing the variety of faucets and showerheads from Delta Brizo and Kohler, particularly the countertop glass rinser by Delta. There were also some really beautiful new appliances from Café Appliances, Signature, Miele and Monogram.” - Lindsey Swanson, Swanson Homes “There were a few great things I saw: one was Zip Wall, obviously this applies to our jobsites, but this magnetic application was really neat, not overpriced and something I had not seen. The other was a new outdoor TV application—simple idea, but we do so many outdoor entertainment areas now, that it's great to see new ideas.” - Kate Hamilton, Custom One Homes “I really enjoyed seeing the new wood-grain printed finish that Diamond Kote will be putting on LP SmartSide. It looked really incredible in person and will give the natural wood look (teak, driftwood, etc.) without all of the maintenance. I also really liked Marvin’s booth and their emphasis on bringing the outdoors in to help us lead a healthier life.” - Sunny Bowman, Dakota County Lumber Co.

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HOUSING INDUSTRY NEWS

Students showcase their skills at the 2020 Builders and Remodelers Show Housing industry members from across the state gathered at the Minneapolis Convention Center Feb. 12 for the annual Builders and Remodelers Show (BRS). The event, hosted by Housing First Minnesota, featured the latest products, technologies and services for all segments of the industry. This year, in an effort to introduce more young people to the construction industry, the event featured a Student Skills Demo which invited students to develop their construction skills and promoted careers in the industry. Student teams from St. Peter High School, Saint Paul College, Eagan High School, Roseville Area High School, Northeast Metro 916, Wayzata High School and Hennepin Technical College all participated in the program. The students demonstrated their ability to interpret blueprints, work

together and use the proper tools by constructing playhouses. Each team had a mentor from the homebuilding industry to help them through the construction process. The drill proved to be a rewarding experience for both the students and the mentors. “It was really great just to get to work with these students and answer their questions,” said Gary Kraemer, a mentor for the skills demo and president of Housing First Minnesota. “I was truly impressed with their excitement for the work that they were doing and their eagerness to learn.” The playhouses will be donated to organizations that help homeless families and children. One home will be auctioned off to raise money for the Housing First Minnesota Foundation at their annual Foundation Gala event in April.

Students from seven statewide schools showcased their skills in the demo during BRS.

Study recommends against 16- and 17-year olds on construction job sites Industry leaders disagree and express disappointment with the study A newly released study conducted by the Minnesota Department of Labor and Industry recommends against the idea of 16- and 17-yearolds on Minnesota construction job sites citing safety concerns. However, industry leaders say there are multiple ways in which these safety concerns can be addressed, and Minnesota’s youth should be provided an opportunity to see if construction might be their career of choice. “Students at some 13 different high schools throughout Minnesota actually build houses each year for homebuyers,” said David Siegel, executive director of Housing First Minnesota and 2020 president of Project Build Minnesota. “Thousands of other students engage in construction activity in classrooms throughout Minnesota. They do this safely under the supervision of a classroom instructor. We in the industry believe a similar arrangement could successfully allow today’s young people to experience what it’s actually like to be on a construction job site.” Robert Heise, executive director of Associated Builders and Contractors of Minnesota and North Dakota and board member of Project Build Minnesota, agreed. “Federal law allows these youth to be on a job site, but Minnesota’s Department of Labor and Industry does not. We have sister chapters across the country, and we’ve checked with them. Many states have found safe and productive ways to give their teens a chance to earn some money while enjoying the camaraderie and feeling of accomplishment that comes from building things,” Heise said. “Training middle school and high school students on an active construction site would mean placing them in a hazardous environment while training them on highly technical skills using dangerous tools, equipment and machinery,” the report said.

Tom Getzke of the Minnesota Builders Exchange and immediate past president of Project Build Minnesota said students wouldn’t be allowed to use these tools. “We believe that by limiting the types of duties (for example, no use of power equipment), limiting heights (no students on a roof ) and applying other common-sense guidelines we can better serve the youth of Minnesota,” Getzke said. There are at least two recommendations in the study with which the industry agrees. The first is that youth need to be provided greater exposure to career opportunities in the construction industry.

“You can get into this industry and make great money, have a tremendous career path, have little to no student debt and be proud to be a Minnesota maker.” Joy DesMarais-Lanz

EXECUTIVE DIRECTOR, PROJECT BUILD MINNESOTA

“That is the whole purpose behind Project Build Minnesota, our 2-year-old nonprofit 501c3. We hope the Legislature will consider providing resources to Project Build so that it can expand its work and reach more of Minnesota’s youth, their parents, counselors and other influencers,” said Siegel. “We are already having success, but with more assets, we could strengthen our outreach.” Research by the University of St. Thomas Applied Business Research program last year indicated Minnesota’s school counselors do not have enough knowledge of the industry and do not adequately understand its career

Project Build Executive Director Joy DesMarais-Lanz (left) and Communications Specialist Tammy Sakry (right) at BRS.

pathways. “We’re working on that,” said Joy DesMarais-Lanz, executive director of Project Build Minnesota. “We will be exhibiting at the Minnesota School Counselors Association conference, as we have for many years, and we have great materials for counselors.” Industry leaders also agree with the study’s assertion that career and technical education programs could be strengthened in Minnesota high schools. “We know that many districts across the state cut back or completely eliminated their technical education programs. We also know that college isn’t the right fit for every Minnesota youth. It’s time for Minnesota’s elected leaders to raise their support of construction programs in schools throughout the state,” said Stu Thompson, CEO of The Builders Group (TBG) and a Project Build Minnesota board member. TBG is the largest self-insured workers compensation program in Minnesota and focuses solely on construction firms. It has formed its own foundation to provide additional support to schools seeking to offer construction education. “We have a shortage of skilled labor in the construction field and all demographers suggest that shortage will continue for a decade or more. We pay exceptionally well. You can get into this industry and make great money, have a tremendous career path, have little to no student debt and be proud to be a Minnesota

maker,” said DesMarais-Lanz. “College isn’t the answer for every Minnesota kid. Many schools and school districts in Minnesota are working on ways to expand construction-related training to better prepare youth in their local areas of the state for a career in the skilled trades. Wouldn’t it be great if they could experience the real word of construction to see if it’s the right fit for them and earn some money in the process?”

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HOUSING INDUSTRY NEWS

| 13

INDUSTRY GIVES BACK

New home for veterans takes shape in Bloomington As the homeless population continues to grow in the Twin Cities, the Housing First Minnesota Foundation along with build partner Lennar is making a difference. The Foundation is wrapping up a project this month that will house four homeless veterans and will provide the stability to help them get back on their feet. The new four-bedroom, single-family home will be handed over to the Minnesota Assistance Council for Veterans (MACV), which will own and operate the home. The lot for the home, located off Penn Avenue in Bloomington, was generously provided to the Foundation by the City of Bloomington’s HRA.

“These projects show how when we work together and use our unique skills and resources, we can truly make a difference in our communities,” said Donnie Brown, Housing First Minnesota Foundation manager. This is the third Housing for Heroes project that the Foundation has built with partner Lennar for MACV. This partnership continues to help make a difference in reducing the homeless veteran population in our state. The Foundation and Lennar are working to advance an additional Housing for Heroes project in North St. Paul to be completed later this year. A new home for homeless veterans will be handed over to MACV in March.

Apartment rehab for a new lease on life The Housing First Minnesota Foundation took on a complete apartment unit remodel that will help house homeless women in need. This January, the Foundation along with build partners Mega Remodel and Cardinal Remodeling kicked off the rehabilitation of an apartment unit for Minneapolis-based Avivo. The apartment unit will be used by Avivo to house women and their children while the mothers go through recovery. The unit the

Foundation is restoring was in rough condition and the remodeling took it down to the studs. Once complete in March, the apartment will have two bedrooms and a new kitchen and living room. This is the ninth apartment unit the Foundation has remodeled and restored for Avivo. These homes are a key piece in Avivo’s effort to help families get back on their feet and find stability and security.

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Contact a sales representative: kevin.morel@jameshardie.com Kevin Morel | (612) 323-6358 kevin.morel@jameshardie.com Contact a sales representative: Kevin Morel | (612) 323-6358 © 2019 James Hardie Building Products Inc. All Rights Reserved. kevin.morel@jameshardie.com © 2019 James Hardie Building Products Inc. All Rights Reserved. Kevin Morel | (612) kevin.morel@jameshardie.com © 2019 James Hardie Building Products323-6358 Inc. All Rights Reserved. Contact a sales representative: 2019 James Hardie Building Products Inc. All Rights Reserved. kevin.morel@jameshardie.com 14 | HOUSING INDUSTRY NEWS©©Kevin Morel | (612) 323-6358 2019 James Hardie Building Products Inc. All Rights Reserved. kevin.morel@jameshardie.com © 2019 James Hardie Building Products Inc. All Rights Reserved.

AD1511-MDW-03/19 AD1511-MDW-03/19 AD1511-MDW-03/19 AD1511-MDW-03/19 AD1511-MDW-03/19

AD1511-MDW-03/19

IN THE DIRT

A quick recap of housing news and development updates

SOURCE: CITY OF CARVER

SOURCE: FINANCE AND COMMERCE

SOURCE: CITY OF MAPLE GROVE

SOURCE: CITY OF OAKDALE

Summergate proposes 344 housing units in Carver

New apartments and townhomes approved in Albertville

Ryan proposes Minnesota Health Village

Lennar lays plans for 1,400 homes in Oakdale

Summergate Development is looking to build 270 single-family homes and 74 townhome units on a 161-acre farm property in the city of Carver. The site is near Carver Elementary School and would include an expansion to Ironwood Park and Preserves by adding an additional 70 acres of the property to the park. Construction is expected to start this spring.

During its Jan. 6 meeting, the city of Albertville approved rezoning 11.8 acres from commercial to residential in order to make way for 159-unit market-rate apartments and 26 townhomes. The development by Heuring Meadows LLC would also include a 10,400-square-foot daycare center. According to the city, there have been no new apartments in Albertville in over 29 years.

Ryan Companies plans to build 400 apartment units and 150 senior living units in what would be the largest commercial development project in Maple Grove described as the Minnesota Health Village. The proposed development would be anchored by the Maple Grove Hospital and, along with the residential units, would add commercial and hospitality space to the area.

Lennar has proposed 1,400 homes on a 208-acre property in Oakdale formerly owned by 3M. The initial plan is for 644 single-family homes, townhomes and row houses along with 766 multifamily units that would include some senior housing. The project would also include trails, open space and parkland.

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03.23.2020

SHARE YOUR HOUSING STORY “We had a great Day at the Capitol! It is a great time to voice our opinions to the people making decisions for all of us!” - David M. Frosch, Kootenia Homes

Housing Day at the Capitol serves as a way for you to get involved—meeting face-to-face with legislators on key issues the housing industry faces every day. Brunch is provided as we share key messages and lobbying tips along with shuttle service to the Capitol and back for the Legislative Reception.

Intercontinental Saint Paul Riverfront

TH ANK YO U TO O UR 2020 SPO NSOR S CAP ITO L S P O NS O R S

ADVOCAT E S PONS ORS

All, Inc. Lyman Companies Scherer Bros. Lumber Co.

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HOUSING INDUSTRY NEWS