M I N N E S O T A
HOUSING INDUSTRY NEWS
INSIDE State Officials, Builders Prepare for Building Code Updates [PG. 5] Addressing the Labor Shortage
NEWS AND INFORMATION FOR HOME BUILDERS AND REMODELERS BY HOUSING FIRST MINNESOTA • HOUSINGFIRSTMN.ORG
[PG. 7]
VOL. 1 ISSUE 3, DEC. 2017
Minnesota Supreme Court to Hear Impact Fees Case Review Follows Court of Appeals Win for Industry The Minnesota Supreme Court announced on Nov. 28 that it will review the Harstad v. Woodbury case. Woodbury appealed the Sept. 18 Court of Appeals decision upholding a district court’s ruling that Woodbury’s Major Roadway Assessment (MRA) fees violate state law. In the Court of Appeals’ opinion, Judge Diane Bratvold said Woodbury “lacks express or implied authority” to impose its MRA fee. This published opinion and decision by the court upheld the long-held belief that cities cannot impose additional taxes or fees upon developers in order to pay for transit-related improvements outside of signed development agreements. Twin Cities’ developer Martin Harstad sued the city of Woodbury in 2016, contending the city’s MRA fees, which are used to pay for traffic-related improvements throughout the city, were not permitted under state law. The Court of Appeals
upheld a lower court’s ruling that these fees are unlawful. For his 183-home Bailey Park project, Harstad was asked to pay $1.3 million in MRA fees on top of paying for all the development’s transportation-related infrastructure. In November 2016, the district court sided with Harstad, saying the MRA fees were illegal. In his decision, Judge Richard Ilkka called the longtime practice “unlawful and unenforceable.” Rochester-area developer Frank Kottschade, Housing First Minnesota and the National Association of Home Builders filed a friend-ofthe-court brief in support of Harstad for the Court of Appeals decision, citing a similar case between the city of Eagan and Country Joe Homes in the 1990s. The Minnesota Supreme Court has not yet set a hearing date for the case.
2018 Legislative Session: What Lies Ahead? The Minnesota Legislature will gavel in the 2018 Legislative Session on Feb. 20. Housing First Minnesota and the Minnesota Association of Realtors will once again present a collection of proposals that will make up the Minnesota Homeownership Initiative. These solutions will address many of the obstacles currently facing the housing industry: labor, regulatory burden and affordability for first-time buyers.
Minnesota Supreme Court Chambers, State Capitol
First-Time Homebuyer Savings Account Last session, the legislature took a positive step forward in encouraging Minnesotans to save more of their own money to purchase their first homes through the establishment of the First-Time Homebuyer
Savings Account. However, work remains. As current law allows, first-time homebuyers and those re-entering the housing market can establish savings accounts to be used towards the purchase of a house and/or closing costs. Married joint filers can contribute up to $28,000 and individuals up to $14,000 each year in a standard savings account. Interest and dividend gains can be claimed as a state tax deduction. In order to incentivize more Minnesotans to save for their dream home, the Minnesota Homeownership Initiative will propose expanding the state tax deduction beyond the interest earned.
CONTINUED >> PAGE 3
2960 Centre Pointe Drive Roseville, MN 55113 HousingFirstMN.org
HOUSING INDUSTRY NEWS M I N N E S O T A
PRSRT STD U.S. POSTAGE PAID PERMIT # 93652 TWIN CITIES, MN
SIGN UP TO BE A PART OF THE HOUSING MOVEMENT • HOUSINGFIRSTMN.ORG
HOUSING INDUSTRY NEWS
| 1