Housing Industry News Vol. 6 Issue 2 - April 2022 by Housing First Minnesota

VOL. 6 ISSUE 2, APR. 2022

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

Sen. Rich Draheim and Tony Weiner of Cardinal Homebuilders testify on Senate File 3259 in front of the Senate's Housing Committee.

Growing coalition calls for legislature to address zoning reform As the housing inventory and affordability crisis continues to worsen in Minnesota, a broad coalition is pressing the legislature to take action. The coalition, which includes the Minnesota Realtors®, Housing First Minnesota, the Minnesota Multi-Housing Association, Minnesota Chamber of Commerce and others, is urging the legislature to adopt Senate File 3259, which has emerged as the leading effort to lift regulatory roadblocks by amending the state’s zoning, permitting and regulatory code rules and laws. The provision is authored by Sen. Rich Draheim (R-Madison Lake). “We are all working toward the same end goal, having a better housing environment for the State of Minnesota,” Draheim stated. The bill’s companion is authored by Rep. Steve Elkins (DFL-Bloomington). The House version has had hearings but has not

proceeded out of its first committee. However, the Senate version has been advancing in the committee process. Draheim’s bill has drawn broad support from multiple testifiers, all of whom cited the roadblocks in the current system which are limiting homeowner choice and preventing a healthy housing market from providing options at all price points. John Phelan from the Center for the American Experiment testified that “affordable housing is rare here because state and local governments effectively make it illegal to build it. This bill offers a way forward.” Data supporting the bill’s primary goal of opening the housing market in Minnesota was presented to illustrate both the depth of the challenge and a potential roadmap to a stronger housing market. “The creation of new, 'missing middle' housing options offers opportunities to ease

these challenges and unlock homeownership for more Minnesota residents,” said Zillow’s Luke Bell. “According to our research, reforming residential zoning rules—even modestly—to allow for more housing construction and density, would be the most effective way to increase housing supply." Bell continued, “Over the last decade-plus, homebuilders simply are not building as many new housing units as they used to. If building permits had been issued at historic rates between 2008 and 2020, there would have been over 40,000 additional new housing units constructed in the Minneapolis-St. Paul region.” Housing policy is well-known for its complexities, and the measure includes amendments to the rules governing Planned Unit Developments (PUDs), which are used at an CONTINUED >> PAGE 8

INSIDE THIS ISSUE

Court of Appeals: Park fee collection requires new park PAGE 5

Minnesota Senate considers changing rent control statute PAGE 9

Minnesota continues to lead in green homebuilding PAGE 15

State’s housing inventory continues its downward spiral Minnesota’s housing market continues to hit new lows in the number of homes for sale, all while homebuyer demand remains strong. This has led to an even more intense home seller’s market where prices are hitting new highs with multiple offers on the table. According to the Minneapolis Area REALTORS®, the Twin Cities has just 4,361 homes for sale presently, about three weeks' supply of inventory (0.8 months), where a balanced market would supply four to six months’ CONTINUED >> PAGE 11 HOUSING INDUSTRY NEWS

| 1

2960 Centre Pointe Drive Roseville, MN 55113 HousingFirstMN.org

PRSRT STD U.S. POSTAGE PAID PERMIT # 93652 TWIN CITIES, MN

PRESIDENT’S NOTE

A louder call to modernize housing

HOUSING INDUSTRY NEWS

Minnesotans have always valued homeownership and a strong housing market. But the awareness about how housing works as a connected ecosystem was fairly limited. That appears to be changing. The housing ecosystem requires affordable choices at all points in the cycle, including rental housing. Minnesota ranks at the bottom of the country's inventory of for-sale housing and our new home costs are the highest in the Midwest. Shamefully, our homeownership equity gap is the worst in the United States. These factors and the urgency to solve them have attracted a growing coalition of organizations who are publicly sharing their perspectives and in some cases, joining the push for legislation to increase homeowner choice and bring back starter homes. Groups like Housing First Minnesota and the Minnesota Realtors® have been at the forefront of the debate to modernize housing in Minnesota, and in 2022 they’ve been joined by thought leaders

April 2022, Volume 6, Issue 2

like the Center for the American Experiment and academic research experts from the Mercatus Institute at George Mason University in Washington DC. These organizations don’t build and sell homes, they provide research, analysis and thought leadership on the importance of housing choice and the regulatory roadblocks hurting homeownership. Others like Zillow and Zonda have contextualized data to help sort out what’s happening in housing from a big picture perspective. As we know, it’s complex and these groups have done a tremendous job laying out the facts and data about where we are and most importantly, where we are going if we don’t modernize. Groups like the Minnesota Chamber of Commerce have also engaged in the housing debate. Its perspective as the leading voice for business and the competitiveness of our state is critically important in this discussion. For Minnesota to remain competitive in the future, we know we need a healthier housing market.

PUBLISHER David Siegel David@HousingFirstMN.org EDITOR Katie Elfstrom Katie@HousingFirstMN.org GRAPHIC DESIGN Emily Doheny ACCOUNTING Janice Meyer James Julkowski 2022 President, Housing First Minnesota

ADVERTISING SALES Brad Meewes Kori Meewes

A growing coalition to modernize housing is the surest sign yet of the increasing momentum for change. I’m looking forward to welcoming more new voices to this discussion as we move forward.

CONTRIBUTING WRITERS Katie Elfstrom Katie@HousingFirstMN.org

Nick Erickson

Nick@HousingFirstMN.org

Onward, James Julkowski

Mark Foster

Mark@HousingFirstMN.org

Kristen Ober

Kristen@HousingFirstMN.org

Kate Wigley Kate@HousingFirstMN.org

HousingIndustryNews.org

David Siegel

David@HousingFirstMN.org

Stay up to date on the latest housing news. Subscribe to our blog at HousingIndustryNews.org

James Vagle

James@HousingFirstMN.org

Advertising

Housing First Minnesota David Siegel, Executive Director

For advertising information, rates, editorial calendar and production specifications, contact: Brad Meewes at 651-269-2399 (Brad@HousingFirstMN.org) or Kori Meewes at 612-801-9874 (Kori@HousingFirstMN.org)

James Julkowski, 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 2022 All rights reserved

Association Health Plan saves members of Housing First Minnesota on average $5,000 or more annually. Wide array of quality plans offered by Blue Cross Blue Shield of Minnesota. Attract and retain the best employees in the business all while saving money.

Start saving today at HousingFirstMN.org/AssociationHealthPlan

Housing First Minnesota is the voice for homebuilders, remodelers and all who are dedicated to building safe, durable homes at a price Minnesotans can afford. 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.

HOUSING INDUSTRY NEWS

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:

It’s easy for every generation to forget how hard it is to buy that first home. Millennials and Gen Z are increasingly feeling frustrated . . . and it will arise as an election issue.” ROBERT DIETZ NATIONAL ASSOCIATION OF HOME BUILDERS

The market wants very much to build more homes in these high-demand locations, but we have a whole set of policies that make it virtually impossible to add housing in a lot of these places."

The government was correct to treat the housing shortage as an emergency after WWII, and we must rekindle that same urgency today." JANNEKE RATCLIFFE URBAN INSTITUTE

JENNY SCHUETZ BROOKINGS INSTITUTION

If policymakers are serious about reining in inflation, then they have little choice but to take on the shortfall in housing supply. This means improving the economics of building enough to overcome the costs that have been holding builders back in recent years.” JIM PARROTT & MARK ZANDI PARROTT RYAN ADVISORS & MOODYS.COM

“The ability to find reasonably priced land without too much regulation is the key to more affordable home prices.”

Policies have to be focused more on making sure that the lower-income and many more middle-income folks participate in the benefit of homeownership.” GAY CORORATON NATIONAL ASSOCIATION OF REALTORS®

ALI WOLF ZONDA

14 Lumber Yards Across MN & WI

Providing our customers with construction solutions, quality building materials and superior service

DRAFTING & DESIGN

WINDOW SERVICES

CABINET DESIGN

WALL PANELS

COMMERCIAL SERVICES

Get a quote today, visit www.abc-clc.com Andersen® is the #1 trusted and recommended window and door brand* *2020 Andersen brand surveys of U.S. contractors, builders & architects “Andersen” and all other marks where denoted are trademarks of Andersen Corporation. ©2021 Andersen Corporation. All rights reserved.

HOUSING INDUSTRY NEWS

| 3

REGULATORY AFFAIRS

Regulatory Roundup

Frost protected foundations in Northern Minnesota, Contractor Recovery Fund report, DLI outreach campaign, upgraded annual report tool The Minnesota Department of Labor and Industry (DLI) has released a new fact sheet on frost-protected foundations in Northern Minnesota. This new document stems from legislation in 2021 that sought to conform Minnesota’s frost-depth standard with that required in neighboring North Dakota. While the legislation did not become law, it prompted DLI to form a Technical Advisory Group (TAG) on the issue at the urging of a coalition including Housing First Minnesota, the City of Moorhead and the Home Builders Association of Fargo-Moorhead. This new fact sheet informs homebuilders and building officials that the Minnesota Residential Code and the Minnesota Building Code allow a less traditional method of reducing the required foundation depth. By utilizing ASCE 32 - Standard for Frost Protected Shallow Foundations, homebuilders can save their buyers money. This method saves construction costs by reducing the excavation depth, the amount of concrete and the size of foundation forms. Contractor Recovery Fund annual report According to its annual report, the Contractor Recovery Fund’s revenue decreased 13% in the fiscal year 2021 to $2.03 million. Minnesota’s fiscal year (FY) 2021 began on July 1, 2020 and ended on June 30, 2021. In FY 2021, homeowners filed 33 claims for payment from the fund, with payouts totaling $970,000 in the 29 claims approved by the state. Claims were filed against 29 contractors, with payment being made in cases involving 27 contractors. The Contractor Recovery Fund’s operating balance was $10.7 million at the end of FY 2021, an 11% increase from FY 2020’s ending balance.

BREWS+ BUSINESS

Hire licensed contractors campaign DLI released a report on its public awareness campaign educating Minnesotans on the importance of hiring a licensed contractor. This multi-channel campaign uses a mix of online, social

HOUSING INDUSTRY NEWS

DLI Launched a statewide consumer campaign to promote hiring a licensed contractor with a mix of online, social media, print, radio and billboards.

media, print, radio and billboards. From April through August 2021, 11 billboards were placed across greater Minnesota to reach regional audiences in Bemidji, Grand Rapids, Detroit Lakes, Brainerd, Duluth, Sauk Centre, Little Falls, Hinckley, St. Cloud, New Ulm and Worthington. Ads ran on 98 radio stations and in 210 newspapers across greater Minnesota. The campaign’s website, hirelicensedmn. com, has had more than 36,000 visits. According to the report, DLI will continue the campaign through September 2022. DLI updates annual reporting tool DLI has updated its public access to the annual reporting data for building permit fees, development, and infrastructure. These reports are required for Minnesota municipalities whose cumulative fees collected exceed $5,000 in a calendar year. A new public access section of the annual report’s website allows users to view and compare data across multiple municipalities within a predefined category. In previous years, access was limited to viewing only one report from a single municipality at a time. Public interest has grown in recent years as municipalities have substantially increased their revenue on building permit fees. The new access tool is available at: secure.doli.state.mn.us/municipal/RepMain.aspx

Rochester sued over illegal transportation district charges Tap House Real Estate LLC, a Rochester restaurant company, is suing the city of Rochester, arguing the city conditioned approval of development on payment of Transportation District Charges in 2019. Tap House Real Estate LLC says it paid the city $102,500 “under duress” for its West End restaurant. The February court filing cites the 2018 Harstad v. Woodbury ruling. According to land use experts, these cases have an important parallel. In both situations, municipalities were conditioning project approval on payment of an unauthorized fee. In the Rochester case, Tap House was not required to waive its legal rights as a condition for approval, and it ultimately paid the fee. In Harstad v. Woodbury, the project applicant sued the city of Woodbury before paying any fee. Transportation improvement district charges are not authorized under Minnesota law. Any payment of these charges is optional, and municipalities may not condition project approval on the payment of these fees. Minnesota courts have taken an unfavorable view of local governments that require payment of these unauthorized fees. Country Joe v. City of Eagan, Harstad v. Woodbury and Housing First Minnesota v. City of Dayton all saw courts toss out similar fees, deeming them illegal. In this court case, Tap House is part of a class-action suit that represents the interest of multiple developers in 14 transportation improvement districts in Rochester, who have all paid additional fees during their development projects. Frank Kottschade, a Rochester developer not involved in the case, said, “Minnesota law is clear; cities cannot charge these fees as a condition for project approval." Kottschade, who has been involved in numerous development-related legal challenges with Rochester (and in property rights cases that have gone all the way to the U.S. Supreme Court) noted that fewer project applicants are tolerating local governments conditioning their approvals on terms not allowed under Minnesota law. This lawsuit argues that the city “may not use ‘voluntary’ contracts to strongarm developers into paying unauthorized transportation infrastructure fees." “Put differently, the City holds developers’ land hostage until developers agree to fund the City’s wish-list of off-site infrastructure projects,” according to the suit. Bills authoring the use of transportation improvement districts have been introduced at the state legislature but have been vigorously opposed by a coalition of organizations including businesses, commercial developers, homebuilders, religious institutions and institutions of higher education.

Leading and Managing Up, Down, & Sideways Free to Attend // Non-Members Welcome April 21, 2022 // Housing First Minnesota Office, Roseville, MN Details and registration // HousingFirstMN.org

Court of Appeals: Park fee collection requires new park In a February ruling, the Minnesota Court of Appeals ruled that cities cannot collect a park fee if the city has no stated plan for building a park. The Puce v. City of Burnsville ruling reverses a 2021 district court ruling for the city of Burnsville. According to the court filing, a property owner was seeking to redevelop a nonconforming Burnsville residential property as a commercial property. At a January 2019 planning commission meeting, the city voted 4-1 to approve the project, with 17 conditions tied to the approval, one of which was the payment of a $37,804 park fee. The project applicant asked the city to waive the fee as the proposed project, an auto dealership and bakery, would not result in the need for more parks. At a January 2019 meeting of the Burnsville City Council, the project applicant objected to the payment of this fee. In February 2019, the city reduced the proposed fee to $11,700, yet the applicant opposed the new fee. It was during reconsideration of the proposal at a March 2019 city council meeting in which one council member asked the Burnsville City Attorney if there was any plan for a new city park. According to the court’s opinion, “The city attorney answered by stating that he was not

aware of any ‘actual land acquisition in the foreseeable future’ but that the City typically acquires land for parks when opportunities arise and ‘continually reviews and enhances amenities for existing parks.'” The project applicant sued the city of Burnsville in district court in May 2019, having been unable to get project approval without paying what the applicant’s attorney said was an illegal fee. The applicant then appealed the district court's 2021 ruling to the Minnesota Court of Appeals, which reversed the district court ruling and sided with the property owner that the park fee was illegal. Under Minnesota law, “The municipality must reasonably determine that it will need to acquire that portion of land for the purposes stated in this subdivision as a result of approval of the subdivision.” (Minn. Stat. § 462.358, subd. 2b(e). Alternatively, a fee can be paid in lieu of land for the expressed purpose of a new park. On the city’s collection of a park fee without a park, the court said, "the City’s decision to impose a park-dedication fee does not have a proper factual basis." On March 9, the city of Burnsville petitioned the Minnesota Supreme Court for review of the case. As of publication, the Court has not indicated if it will take this review.

A project applicant sued the city of Burnsville in district court in May 2019, having been unable to get project approval without paying park fee. | Photo: City of Burnsville

Your Source For Deck Railing Products Available Through Local Building Materials Dealers

www.absolutedist.com

• In-Stock • Fast Shipping • Easy Installation

(800) 335 - 5909

HOUSING INDUSTRY NEWS

| 5

REGULATORY AFFAIRS

Minnesota Pollution Control Agency releases video on common plan of development This Minnesota Pollution Control Agency (MPCA) released a video to educate homebuilders and developers on proper management of projects under the common plan of development rubric. Since March 2003, the U.S. Environmental Protection Agency has required all construction projects disturbing over one acre of land to obtain an NPDES/SDS stormwater permit. In addition, owners or operators also need permit coverage for smaller projects that are part of a larger common plan of development or sale that collectively will disturb one or more acres. A common plan of development or sale means a contiguous area where multiple separate and distinct land-disturbing activities may be taking place at different times, on different schedules, but under one proposed plan. This term covers subdivisions, phased projects or any combination of construction activities. "One plan" is broadly defined as any announcement or piece of documentation (including a sign, public notice or hearing, sales pitch, advertisement, drawing, permit application, zoning request, computer design, etc.) or physical demarcation (including boundary signs, lot stakes, surveyor markings, etc.) indicating construction activities may occur on a specific plot.

Under these standards, for projects with more than a single entity owning the entire development and controlling developmentrelated activities that fall under the Minnesota Construction Stormwater Permit, each parcel must have an appropriate water management plan. In these cases, the original project applicant and each individual property owner must complete a subdivision registration form that transfers duties and responsibilities covered under the stormwater pollution prevention plan to each property owner. Submission of these forms transfers responsibilities to the new property owners. According to the MPCA, the agency has witnessed increased noncompliance for common plan of development/subdivision projects. Typically these projects are new, single-family home subdivisions and are required to submit subdivision registration forms for each lot. The agency says this requirement is often overlooked, leading to enforcement cases against the developers, builders and even the homeowners themselves. To view the video, visit housingindustrynews.org

MPCA shares examples of common plan of development activities that require permit coverage. Photo: MPCA

Minnesota Department of Transportation announces spring load restrictions The Minnesota Department of Transportation (MNDOT) has announced the beginning of spring load restrictions. • South and Southeast frost zones spring load restrictions began March 14 at 12:01 a.m.

R E G I S T R AT I O N IS OPEN

5.20.2022  OMNI VIKING LAKES HOTEL, EAGAN, MN FOUNDATIONGALA.ORG

• Metro frost zone spring load restrictions began March 16 at 12:01 a.m. • Central frost zone spring load restrictions began March 18 at 12:01 a.m. • North-Central and North frost zones spring load restrictions began March 21 at 12:01 a.m. Overweight permits for more than 80,000-pound gross vehicle weight continues during spring load restrictions and new permits will be issued if all axle and group weights are legal. Full-summer overweight permits can be issued during the spring load restriction period for travel on the interstate system only. Middle-range overweight permits become available within each frost zone when spring load restrictions are lifted. Full-summer overweight permits become available two to three weeks after spring load restrictions are lifted. Frost zones and restricted routes can be found on the MnDOT load limits map. At the time of publishing, MNDOT had not announced an end to the load restrictions. All changes are made with a minimum three calendarday notice. Start and end dates and other load limit information are shown at mndot.gov/loadlimits

HOUSING INDUSTRY NEWS

Legislative issues to watch in 2022 No deal on unemployment trust fund leads to higher taxes for businesses The date was circled on the calendar for many months, March 15. This was the day that the legislature needed to pass a plan to repay the $1.3 billion in debt owed to the federal government and rebuild the unemployment trust fund. Gov. Tim Walz and the Department of Employment and Economic Development Commissioner Steve Grove both indicated that the legislature should use $2.73 billion to stop tax increases on businesses. The Senate passed a bill doing just that with strong bipartisan support. Democrats in the House of Representatives had other plans, instead wanting to link the unemployment trust fund fix to frontline worker bonuses. During the last legislative session, the legislature agreed to pay $250 million in bonuses to frontline workers. However, in the interim, they could not agree on the definition of “frontline worker.” Given the large surplus, Democrats in the House of Representatives wanted to expand the frontline worker pay to $1 billion to give bonuses to more Minnesotans. Leaders of both chambers and Walz met numerous times to try to negotiate a broader package, but as of print, neither the unemployment trust fund nor the frontline worker pay has been fixed.

Legislature considers a new way to calculate residential building permit fees

For many years, the legislature has been discussing building permit fees and the vast differences in pricing that occur in many growing communities. This year, Rep. Steve Elkins (DFL-Bloomington) has introduced a bill that would direct the commissioner of the Department of Labor and Industry to establish a cost-persquare-foot valuation of properties to set residential building permit fees. When the bill was heard in the Local Government Division in the House of Representatives, Nick Erickson, director of regulatory affairs and research at Housing First Minnesota, testified. “Today building permit fees must be established based on valuation, as set by the building official,” said Erickson. “Interestingly, this value reference point is partially based on square footage. Yet, even with this table and valuation submissions from builders that, in many cases are updated weekly to reflect their actual construction costs, we see no consistency in the accepted valuation. HF 4271 removes the guesswork and inconsistent valuation practice.” The bill passed out of both the Local Government Division and the State Government Committee with bipartisan support.

Several issues at the Capitol this session could impact housing.

Legislation would mandate electric vehicle spaces in new multifamily construction A bill that would change the State Building Code to add a provision requiring a minimum number of electric vehicle-ready spaces to new commercial and multifamily structures is advancing in the Democrat-controlled House of Representatives. House File 4066 is authored by Rep. Jamie Long (DFL-Minneapolis). The bill was discussed in the Labor, Industry,

Veterans and Military Affairs Finance and Policy Committee. During the hearing, many legislators voiced concerns about the bill, including Rep. Bob Dettmer (R-Forest Lake). “I’ve always felt that the free market will determine what the needs are for the public,” said Dettmer. After discussion, the bill advanced out of the committee on a partisan vote. No action with the Senate companion has occurred.

The Fine Art of Creating Exceptional Exteriors. Replace. Repair. Restore.

Roofing Siding Windows Gutters Metal License #BC751852

MN HIN Half Page Apr22.indd 1

For your complimentary consultation, connect with us: 763-298-9047 www.allstartoday.com

3/9/22 12:21 PM

HOUSING INDUSTRY NEWS

| 7

HOUSING ON THE HILL CONTINUED FROM PAGE 1

Growing coalition calls for legislature to address zoning reform alarmingly high rate in many growing Minnesota cities. Development through the PUD process was envisioned by the legislature as a rare occurrence, necessary only for unique land situations and unusual layouts. It has instead become the standard, which is problematic in that it requires developers to sit with a city, which has all the ultimate authority, and “negotiate” to achieve the desired development. “Mounting evidence suggests that the institutions of development in suburban Minnesota are broken. An increasing number of suburbs are abandoning traditional zoning in favor of PUDs. PUDS are appropriate for unique or innovative projects, but they are an invitation to opaque policymaking and favoritism,” said Salim Furth of Mercatus Center at George Mason University. Developers have long stated that the PUD process provides cities the opportunity to make unreasonable and costly demands, which are ultimately passed along to the future homebuyers in that new community. Modernizing the PUD process is a priority for housing industry experts, who note that the proliferation of PUD usage is one of the biggest factors creating exclusionary housing policy. “If there was one thing that I could fix today, it would be to adopt the proposal by Sen. Draheim that would eliminate the ability of cities to mandate the use of Planned Unit Developments on developers seeking new housing projects. Because it puts an unfair advantage on the local unit of government, which is the regulator,” said Peter Coyle of Larkin Hoffman law firm. “All of those added costs that are part of that PUD 'negotiation' are passed on to the consumers," Coyle continued. "All of these things add to the costs of a house." The committee also heard testimony from homebuilders, who gave a real-world perspective about the strong demand for starter homes that simply cannot be met in the current housing approval process. “On a weekly basis, I hear from customers who are interested in learning more about building a new home. However, their budgets are nowhere close to what we can build for them—even at the basic, entry-level home plan,” said Tony Wiener of Cardinal Homes. “Today, our requirements, our zoning rules, our land costs, lot sizes, our park fees, our engineering requirements—they don’t allow for the simplicity we used to take for granted; that allowed our state to grow and flourish,” Wiener said. While much of the housing policy focus is on the high-growth regions in Minnesota, the housing inventory and affordability crisis is impacting all of Minnesota. “This lack of housing is a barrier to attracting workforce talent in Minnesota. This lack of housing is especially acute in parts of Greater Minnesota,” stated Beth Kadoun of the Minnesota Chamber of Commerce. The technical provisions of the bill drew opposition from city staff members, as well as representatives from local government special interest groups. The committee also heard from groups concerned with language in the bill requiring a five-year payback on any new energy code provisions. The bill passed out of its first Senate committee and will receive further review as it moves forward. Complex and controversial legislation is always a challenge at the Capitol, but the tenor of the discussion and long-term ramifications of inaction were highlighted by bill supporters. “The question before us today is how will the next generation and the generations after that achieve homeownership?” said David Siegel, executive director of Housing First Minnesota.

New legislative and congressional maps force moves and shake-ups among lawmakers As the clock struck noon on Feb. 15, most activities at the Minnesota Capitol came to a standstill. The reason? The highly anticipated new legislative and congressional maps were released by the five-member panel appointed by the Minnesota Supreme Court. This came after the legislature failed to find a compromise of its own in drawing the maps. The newly drawn districts took a “least changes” approach in order to accommodate the population shifts that have taken place since the last time the maps were drawn in 2012. This likely results in an opportunity for both parties to control a chamber or both chambers of the legislature over the course of the next decade. Minnesota is currently one of only a handful of states with a split legislature. "Swing districts will remain swing districts," Todd Rapp, a DFL operative told the Star Tribune. "The good Democratic districts will remain good Democratic districts. The good Republican districts will remain good Republican districts." Dozens of legislative incumbents also found themselves “paired” with their colleagues in the same district, including House Minority Leader Kurt Daudt (who was paired with fellow Republican Rep. Sondra Erickson) and Senate Minority Leader Melisa Lopez Franzen (who was paired with fellow DFL Sen. Ron Latz). A combination of retirements, running for other offices, primaries and general election races will ultimately settle who will remain in the legislature.

U.S. Congressional Plan C2022 KITTSON

ROSEAU LAKE OF THE WOODS

MARSHALL KOOCHICHING PENNINGTON BELTRAMI

RED LAKE POLK

COOK CLEARWATER

NORMAN

ST. LOUIS

ITASCA

MAHNOMEN HUBBARD

CLAY

BECKER

WILKIN

OTTER TAIL

LAKE

CASS

WADENA

CARLTON

AITKIN CROW WING

7 MILLE LACS

TODD GRANT

MORRISON

DOUGLAS

SHERBURNE

KANABEC

ANOKA

POPE

STEARNS

BIG STONE

ISANTI SHERBURNE

KANDIYOHI CHIPPEWA

YELLOW MEDICINE

MEEKER

RENVILLE

REDWOOD

NICOLLET

SCOTT

DAKOTA

MURRAY

NOBLES

COTTONWOOD

JACKSON

WATONWAN

MARTIN

WABASHA

DODGE

1 FREEBORN

DAKOTA

GOODHUE

RICE

BLUE EARTH WASECA STEELE

FARIBAULT

7 SIBLEY

BROWN PIPESTONE

RAMSEY

CARVER

LE SUEUR

WASHINGTON

HENNEPIN RAMSEY MCLEOD

HENNEPIN

ANOKA

WRIGHT

SIBLEY LYON

CHISAGO

SWIFT

LINCOLN

8 WASHINGTON

BENTON

STEVENS

LAC QUI PARLE

CHISAGO

6 WRIGHT

TRAVERSE

ROCK

Metro Area

PINE

MOWER

OLMSTED

WINONA

FILLMORE

HOUSTON

February 2022

The highly anticipated new legislative and congressional maps were released by the five-member panel appointed by the Minnesota Supreme Court in February. | Photo: Minnesota Legislature

TOUGHER THAN THE ELEMENTS Stands up to storms and harsh weather Water resistant to protect against swelling, warping and cracking; also resists mold damage ®

James Hardie fiber cement products are Engineered for Climate . For Won’t be eaten by animals or insects ®® uncompromising performance, our HZ5. For siding and trim are specifically James Hardie fiber cement products are Engineered for Climate ® designed to resist shrinking, and cracking even after of wet uncompromising performance, our HZ5 siding and trimswelling are specifically Fire years resistant ® ® James Hardie® fiber cement products are Engineered for Climate®. For or freezing conditions. A James Hardie exterior can help keep your homes designed to resist shrinking, swelling and cracking even after years of wet James Hardie® fiber cement products are® Engineered for Climate®. For uncompromising performance, our HZ5 and trim specifically James Hardie® fiber cement products are®siding Engineered for are Climate . For ® or freezing conditions. A James lookingHardie beautiful longer no matter whathomes nature brings. Helps reduce time and money spent on exterior can– help keep your uncompromising performance, our HZ5 and trim are specifically ®siding James Hardie fiber cement products are Engineered for Climate . For designed to resist shrinking, swelling and cracking even after years of wet ® ® uncompromising performance, our HZ5 siding and trim are specifically maintenance ® looking beautiful longer – no matter what nature brings. James Hardie fiber cement products aresiding Engineered for are Climate . For designed to resist shrinking, swelling and cracking even after years of wet uncompromising our HZ5 and trim specifically ® performance, ® or freezing conditions. A James Hardie exterior can even help keep your homes ® cracking designed to resist shrinking, swelling and after years of wet James Hardie fiber cement products are Engineered for Climate . For uncompromising performance, our HZ5 siding and trim are or freezingtoconditions. A James Hardie exterior can even help keepspecifically your homes designed resistlonger shrinking, and cracking after years of wet ® Achieve instant curb appeal and lasting character. looking beautiful no swelling matter nature brings. or freezing A–James Hardie exterior can helptrim keep your ® ®homes Contact a sales representative: uncompromising performance, ourwhat HZ5 siding and areyears specifically designed toconditions. resist shrinking, and cracking even looking beautiful longer –James no swelling matter what nature brings. James Hardie fiber cement products are Engineered forafter Climate .ofForwet or freezing conditions. A Hardie exterior can help keep your homes Visit jameshardiepros.com looking beautiful longer – no matter what nature brings. Kevin Morel | (612) 323-6358 Contact ® cracking designed to resist shrinking, swelling and even after years of wet a sales representative: or freezing conditions. A–James Hardie help keep your homes uncompromising performance, our what HZ5exterior sidingcan and trim are specifically looking beautiful longer no matter nature brings. kevin.morel@jameshardie.com Kevin Morel | (612) 323-6358 or freezing conditions. James Hardie can help keep your homes looking beautiful longer –Ano matter what nature brings. designed resist shrinking, swelling andexterior cracking even after years of wet Contact ato sales representative: kevin.morel@jameshardie.com looking beautiful longer – no matter what nature brings. Contact a sales representative: or freezing A323-6358 James Hardie exterior can help keep your homes © 2019 James Hardie Building Products Inc. All Rights Reserved. AD1511-MDW-03/19 Kevin Morel | (612) Contact a conditions. sales representative: Kevin Morel | longer (612) 323-6358 Contact a sales representative: looking beautiful – no matter what nature brings. kevin.morel@jameshardie.com © 2019 James Hardie Building Products Inc. All Rights Reserved. AD1511-MDW-03/19 Kevin Morel | (612) 323-6358 ®

HOUSING INDUSTRY NEWS

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

Minnesota Senate considers changing rent control statute

Senate legislation would change state statute so that voters could no longer approve rent control policies.

With the passing of rent control measures by voters in both Minneapolis and St. Paul this past November, the Minnesota Senate is proposing legislation that would prevent the implementation of rent control in Minnesota. “If it has an impact on the overall health of our state, then maybe we should step in,” stated Sen. John Jasinski (R-Faribault), as the discussion around Senate File 3414 was wrapping up in the Senate Local Government Committee, the last committee stop before the Senate Floor. The bill would change state statute so that voters could no longer approve a rent control policy in their city, and it would be retroactive to November 1, 2021, making the two recent rent control votes in the cities of Minneapolis and St. Paul null. Jasinski cited his own experience renting an apartment in St. Paul as an example of the impact the new policy is having on the market. He said he had never seen more than a 5% annual increase on his rent, but his January bill showed an increase of 43.79%. “With only one city adopting a rent control ordinance by initiative and referendum, we can already see the chaos it has created," stated Cecil Smith, president and CEO of the Minnesota Multi Housing Association,

during public testimony on the bill. "Advocates for the rent control policy chose to create the most restrictive rent control policy in the United States, and it has been disastrous for our housing market. This policy has taken Minnesota off the national map for housing investment.” Sen. Rich Draheim (R-Madison Lake), the author of the bill and chair of the Housing Committee, cited recently released Census Bureau statistics that show housing permits in the city of St. Paul have fallen 80% since the passage of the rent control policy. Whereas, the city of Minneapolis, which has not yet drafted a rent control policy, has seen an increase in permits by 68%. “We all know rent costs too much. We all know buying a house costs too much. That is partially because of supply and demand,” Draheim said. He went on to state that economists nearly unanimously agree that rent control policies are destructive to cities and their potential future housing production. Having passed through the proper committees the bill was sent to the Senate floor where it awaits further action. The House of Representatives has yet to hear a companion bill.

HOUSING INDUSTRY NEWS

| 9

MARKET REPORT

Housing market report

State of Minnesota

Homebuilding in the Twin Cities moderates in February

Moorhead

SOURCE: CITY OF MOORHEAD

1,672

Duluth

Year-to-Date Single-Family Construction Select Cities Through February 2022 SOURCE: U.S. CENSUS

SOURCE: U.S. CENSUS

St. Cloud

As supply chain constraints, labor shortages and increasing interest rates continue to cause headwinds for new homes construction, Twin Cities homebuilders pulled permits for the fewest number of housing units in February since 2016. Permits for new single-family homes dropped by 17% in February with 432 permitted units. However, overall demand for new housing remains strong throughout the metro area as the existing home market continues to tighten.

SOURCE: CITY OF ST. CLOUD

Twin Cities

1,354

Mankato

SOURCE: U.S. CENSUS

Rochester

SOURCE: U.S. CENSUS

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

FEB. 2022

+8.3%

FEB. 2022

$340,000

$304,500

FEB. 2021

+7.8%

$314,000

Minnesota Construction Employment Past 5 Months SOURCE: DEED

$282,500

Y-Y Change

2021

$314,000

$282,500

Twin Cities Median Sales Price

Minnesota Median Sales Price

SOURCE: MINNEAPOLIS REALTORS®

SOURCE: MINNESOTA REALTORS®

Twin Cities Construction Employment Past 5 Months SOURCE: DEED

United States

South - 83

West - 86

Midwest - 82

Northeast - 81

Regional Remodeling Market Indices, 2021 Q4 SOURCE: NAHB

The Overall Remodeling Market Index is calculated by averaging the Current Marketing 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.

10 |

HOUSING INDUSTRY NEWS

Employment Update Minnesota’s unemployment dropped slightly on a seasonally adjusted basis to 2.7% in February, according to the Minnesota Department of Employment and Economic Development. This is the lowest rate for the state since 1999. The national unemployment rate also ticked down from 4% in January to 3.8% in February. Construction in Minnesota recorded a 4.6% employment growth, or 4,906 jobs, since February 2021.

CONTINUED FROM PAGE 1

State’s housing inventory continues its downward spiral worth of homes given recent demand. Statewide inventory is sitting at just 5,801 homes with 0.9 months of supply. The REALTORS state that inventory levels dipped 19.0% from this time last year. Compounded with a 38.2% fall from 2020 to 2021, the metro is facing a new level of inventory shortage. “Homes sold more quickly last month than they did last February, and prices rose over 8.0%,” said Denise Mazone, president of the Minneapolis Area REALTORS. “While we may not reach the heights of 2020 and 2021, the market remains competitive, homes are still selling rapidly often with multiple bids, and buyers and sellers need to be prepared to move quickly.” Market times have been falling for years, but today’s listings spend even less time on the market. Two years ago, half of the listings went under contract in under 40 days, but last month, half of the listings spent fewer than 19 days on the market. That’s more than a 52.0% drop. The median sales price for the state hit $304,500 in February. In the Twin Cities, it rose 8.3% from last February to $340,000. "Homeowners have gained significant equity, particularly over the last few years,” according to Mark Mason, president of the Saint Paul Area Association of REALTORS®. The median sales price pre-pandemic in February 2020 was $282,000 for the Twin Cities and $255,000 for the state. At that time, the month’s supply of inventory for the state was two months of supply and for the Twin Cities was 1.6 months of supply. Many thought those numbers were startling, but two years later, the supply of homes in our state and the demand for them has become alarmingly more unbalanced.

February Inventory (Active) Count | Twin Cities 35,000

February Inventory (Active) Count | Twin Cities +9.4% 31,612

+11.8% 28,902

30,000 35,000

+35.5% 25,846

25,000 30,000

20,000

-12.3% +9.4% 27,738 31,612 +11.8% 28,902

+35.5% 25,846

+10.8%

-11.2% 24,618 -4.8% -21.8% 23,442 18,324

25,000 19,369 -1.5%

19,081

17,488

15,000

10,000

5,000

20,000

-11.2% 24,618 -12.3% -4.8% 27,738 23,442

+10.8% -1.5% 19,369 19,081

-21.8% +5.5% -25.5% 18,324 -2.5% 14,039 13,654 13,306

17,488

-12.7% 12,253 +5.5% -19.5% -25.5% -2.5% 13,654 13,306 14,039 9,863 -14.9% +5.6% -1.8% -12.7% 8,870 8,712 12,253 8,396

15,000

-19.5% 9,863

10,000

-38.2% +5.6% -1.8% -14.9% 5,386 -17.5% 8,870 8,712 8,396 4,443 -38.2% 5,386 -17.5% 4,443

5,000

Source: Minneapolis Area REALTORS®

Historical Inventory of Homes for Sale in Minnesota

Source: Minnesota Realtors®

Real Estate Law at Every Level Rob Stefonowicz is an experienced trial attorney and appellate advocate. He advises clients on real estate, eminent domain, land use, environmental and construction-related disputes. Rob has extensive experience in eminent domain (condemnation) matters and has served as the chair of the Eminent Domain Section of the Hennepin County Bar Association (Minnesota’s largest district bar association) as well as the chair of the Larkin Hoffman’s real estate litigation practice group. Rob Stefonowicz | 952- 896-3254 | rstefonowicz@larkinhoffman.com Bryan Huntington represents clients in the enforcement of property rights. He represents landowners and contractors in litigation and negotiation adversarial to governmental subdivisions (counties, cities, townships, etc.) and government agencies, including matters involving eminent domain, inverse condemnation, zoning, administrative law and payment disputes. Bryan Huntington | 952-896-3370 | bhuntington@larkinhoffman.com

HOUSING INDUSTRY NEWS

| 11

MARKET REPORT

Construction supply chain continues to hinder new home construction

Interest rates set to rise going into spring

Construction material costs have been on a rollercoaster ride for over a year. The COVID-19 pandemic upended many sectors of the supply chain and made materials harder to get and more expensive. As a result, homebuilders have reported delays in construction projects. Now, fears over the rise in inflation and the war between Russia and Ukraine have spurred further cost increases. According to the National Association of Home Builders, building material prices have increased 20.4% since March 2021. Russia is a major producer of materials like copper and aluminum, two materials that were already significantly impacted by supply chain constraints diminishing global stockpiles. The prices for aluminum and copper saw year-over-year increases of 33% and 25%, respectively, in January 2022. Now, as major production companies pull out of the region and trade sanctions are implemented, these prices are expected to continue their rise. Similar price increases are seen throughout the construction industry. According to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics, building material prices increased 20.4% year-over-year and 10.6% in the past five months. Materials like softwood lumber are seeing slight increases also. The PPI for softwood lumber increased 2.6% in February after sustaining a 28.9% increase in January and December. As demand for new homes continues to put pressure on the production of new units, homebuilders are expecting high material prices to continue to affect the construction process and their timelines.

Earlier this year, the Federal Reserve indicated that it would be making adjustments to the interest rate levels in an attempt to confront the growing concerns of inflation. This announcement came after interest rates remained at record-low levels for more than a year in response to the COVID-19 pandemic and its ensuing economic implications. Throughout the early spring, inflation has become more of a pressing concern, affecting many economic sectors in some fashion. Mortgage rates, as a result, climbed past 4% in March. This is the first time since May 2019 rates have reached this level according to Freddie Mac. By the first week in April, the 30-year mortgage rate had risen to 4.8%. Consequently, while the rate increase may drive initial activity from those who have been considering a homebuying purchase, experts predict a downturn in the all-out frenzy

of homebuyers flooding the market in subsequent months. According to the National Association of REALTORS®, previously owned home sales fell 7.2% month over month in February. This rate is 2.4% lower than February 2021. "Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases," said Lawrence Yun, NAR's chief economist. "Some who had previously qualified at a 3%

mortgage rate are no longer able to buy at the 4% rate.” According to the Minnesota Realtors®, Minnesota’s housing market saw a 12.9% decrease in closed sales in February. Builders are starting to feel the impacts of these rate hikes. The National Association of Home Builders/Wells Fargo Housing Market Index reported that builders’ sales prospects for the next six months declined 10 points to 70. Builder sentiment stood at 82 in March 2021. Anything above 50 is considered to be positive. Earlier this month, the Federal Reserve signaled that interest rates may be hiked up to seven more times throughout the rest of the year as the Fed moves to tamp down inflation.

Mortgage rates climbed past 4% in March.

MINNESOTA CONTRACTOR

Pre-License Exam Prep ONLINE COURSE

Learning Tools Provided:

According to the MN Department of Labor & Industry, 40% of those who take the Minnesota Contractor License Exam fail. One reason that may be? They didn’t take a pre-license training course.

• Video training taught by a former building oﬃcial and Minnesota building codes expert • 2020 Minnesota Residential Code Book ($110 value) • Course Study Guide • Exam Guidebook

If you know of someone wanting to become a licensed contractor in Minnesota, tell them about Contractor University’s online MN Contractor Pre-License Exam Prep course.

• Minnesota Statutes Booklet • Practice Exam with more than 175 Questions

Cost: $249

Details and registration at ContractorU.com

12 |

HOUSING INDUSTRY NEWS

CONTRACTOR UNIVERSITY IS SPONSORED BY

Wide-open construction jobs in 2022 The construction industry continues to see an increase in the number of open jobs. According to the National Association of Home Builders (NAHB), the number of open construction jobs increased to 380,000 unfilled positions in January. The record for open construction jobs was 416,000 in April of 2019. NAHB estimates that the construction job openings rate is likely to see increased upward pressure as both the residential and nonresidential construction sectors expand. Attracting skilled labor will remain a key objective for construction firms in the coming quarters and will become more challenging as the labor market strengthens and the unemployment rate declines. According to NAHB, hiring in the construction sector remained solid in January, albeit easing to a 4% rate. The pandemic peak rate of hiring occurred in May 2020 (10.4%) as a rebound took hold in homebuilding and remodeling. In Minnesota, the construction sector has been losing jobs at a time when it needs to be gaining jobs to keep up with the demand for new housing. Construction lost 1,400 jobs in January 2022 and posted negative annual growth in the past 12 months, down 0.1%.

Source: National Association of Home Builders

PUT NATURAL GAS IN, GET A LOT OUT.

Xcel Energy’s FastApp tool helps speed up your natural gas hookup. It gives you access to dedicated professionals, costeffective designs and in-project timelines. Plus you’ll alwayshave a single-point contact with our construction team. For more info, visit xcelenergy.com/Builders.

9.75x6.675_MN-HINdirec_Apr2021_P01.indd 1

4/2/21 10:42 AM

HOUSING INDUSTRY NEWS

| 13

INDUSTRY IN ACTION

Housing industry gathers to support homeownership at the Capitol Bipartisan support for housing solutions discussed during Housing Day at the Capitol Members of the homebuilding and real estate industry once again joined together for Housing Day at the Capitol this March, an annual event that communicated to our state legislators the need to reduce the regulatory barriers to market-rate affordable housing and grow homeownership. Housing First Minnesota and the Minnesota Realtors® once again hosted the event which featured an in-person legislative panel and the opportunity to join virtually. With physical access still limited at the Capitol, members instead went to the Intercontinental Hotel in St. Paul to hear from legislative leaders from all four caucuses including Sen. Kari Dziedzic (DFL-Minneapolis), Sen. Rich Draheim (R-Madison Lake), Rep. Steve Elkins (DFL-Bloomington) and Rep. Jim Nash (R-Waconia). Blois Olson of Fluence Media moderated the panel discussion. There was bipartisan support that the housing supply issue is the top priority in addressing Minnesota’s housing needs.

“Our country was built on property rights. We need to get government out of the way and allow builders to build,” stated Draheim, chair of the Senate Housing Committee. “We need housing across the spectrum, and we need housing across the spectrum everywhere," Dziedzic added. Additionally, Nash and Elkins both agreed that municipal governments receive their authorities from the state government and that it was time for Minnesota’s legislature to address zoning laws. Along with the legislative panel and overview of issues, attendees and members were encouraged to contact their legislators by email or phone to share support for housing initiatives that address affordability and availability of homes. Following the event, Minnesota Realtors and Housing First Minnesota leadership and advocacy teams met in the Capitol with all four caucus leaders to share concerns and insight from the housing industry. Housing First Minnesota and the Minnesota Realtors host Housing Day at the Capitol.

Attendees heard from industry and association leadership as well as from a legislative panel on housing.

Moderator Blois Olsen and legislative panel members Rep. Steve Elkins and Rep. Jim Nash.

Thank You to Our Generous Donors For Making This Possible

The Parade of Homes has a proud legacy of providing homeownership opportunities F I R ST - T I M E H O M E B U Y E R

$10K

Giveaway

14 |

HOUSING INDUSTRY NEWS

in our state. In our continued commitment to expanding the opportunity for homeownership for everyone, everywhere in our state, we’re pleased to launch the Parade of Homes First-Time Homebuyer $10K Giveaway!

Minnesota continues to lead in green homebuilding According to the Residential Energy Services Network (RESNET), Minnesota remains at the top of the charts when it comes to energy-efficient homes. Minnesota’s average Home Energy Rating System (HERS) Score is 50. This is the lowest average HERS Score among states that energy test more than 3,000 homes. The lower the HERS Score, the more energy efficient the home. The state’s high ranking is in part due to Minnesota’s Green Path program developed a decade ago by Housing First Minnesota. This program has helped builders

go above and beyond the code to provide additional energy-efficient benefits to their homebuyers. Minnesota’s Green Path provides each home with a Home Performance Report (HPR) that includes an energy-efficiency score called a HERS Index Score developed by the nonprofit RESNET. The U.S. Department of Energy has determined that a typical resale home scores 130 on the HERS Index, while a standard new home is awarded a rating of 100. A home with a HERS Score of 70 is 30% more energy efficient than a standard new home.

In 2021, the national average HERS Score for newly constructed homes was 58. That score means the homes tested were, on average, 42% more efficient than a home built as recently as 2006. To date, Minnesota’s Green Path has provided more than 35,000 HPRs for new homes. With the impressive average HERS Score of 50, the average Minnesota Green Path energy-tested home is 50% more energy efficient than your standard new home and 61% more energy efficient than the average existing home.

Number of HERS-Rated Homes in 2021

Average HERS Score

Texas

70,314

Arizona

23,135

Florida

22,357

North Carolina

20,370

Colorado

17,616

South Carolina

12,682

Indiana

12,149

Virginia

10,166

Minnesota

9,621

Ohio

9,511

State

THANK YOU GREEN PATH SPONSORS

Minnesota has lowest average HERS Score among states that test 3,000 homes or more. For more information about Minnesota’s Green Path program, visit WWW.MNGREENPATH.ORG

HOUSING INDUSTRY NEWS

| 15

INDUSTRY GIVES BACK

Home and accessory dwelling unit for veterans progresses Construction on a new North Minneapolis home with an accompanying accessory dwelling unit (ADU) for veterans is reaching its final stages. The Housing First Minnesota Foundation and build partner Lennar broke ground on the home in November. The home and ADU will be ready for veterans to move in this spring. The Minnesota Assistance Council for Veterans (MACV) will take ownership of the home once construction is complete. This four-bedroom, two-bathroom home —with an additional bedroom, bathroom, and small living room in the ADU—will serve unrelated single veterans facing homelessness as they live together in the community to recover. MACV provides an array of services to the veterans living in these units with the intention that they will move on to more permanent housing following their stay there. “We are pleased to continue partnering with MACV and Lennar on Housing for Heroes. Housing is a vital cornerstone for stability and success, and we’re thrilled to be a part of such a worthy cause,” said David Siegel, the Foundation's executive director. The Foundation estimates that this one project will serve up to 640 veterans over a 50-year period. This build project is the Foundation’s sixth Housing for Heroes home, and several more are scheduled for 2022.

Construction is underway on a four-bedroom home with an accessory dwelling unit in North Minneapolis to serve veterans experiencing homelessness.

FLEXIBLE AND SIMPLE

A Construction Loan for Builders & Buyers

With a One-Step Construction Loan from Old National, your clients can manage the entire home financing process with one application. That means less hassle and more peace of mind for everyone involved. • Convenient one-time closing • Rate locked at application to avoid rising rates during construction • Interest-only payments during construction period, up to 12 months • Variety of rates and terms available • Conforming and jumbo loan amounts available To learn more, our mortgage experts are ready to help. Steve Dobin Mortgage Sales Manager, SVP NMLS #488964 612-656-3443 Steve.Dobin@oldnational.com Apply online: oldnational.com/dobin Dillon Borowicz Mortgage Sales Assistant NMLS #2305484 612-656-3778 Dillon.Borowicz@oldnational.com

oldnational.com/mortgage

SCAN TO LEARN MORE

Subject to credit approval. Property insurance required.

16 |

HOUSING INDUSTRY NEWS

They say mastering a craft takes 10,000 hours. How does 97 years sound? We’ve been innovating for a very long time at Pella.® It’s an obsession that’s led us to over 150 patents throughout our history. We offer a full line of beautifully crafted windows, patio doors, and entry doors in a wide variety of styles to ﬁt every design taste and budget. With dedicated window experts, showrooms across the region, and service after the sale, your local Pella team is ready to help you master your next project. PELLA WINDOWS AND DOORS PERFECTLY BEAUTIFUL

pro.pella.com

Southern Minnesota

Twin Cities Metro Area

Central & Northern Minnesota

Wisconsin, North & South Dakota

Mankato, MN | 612-237-6392

Plymouth, MN | 952-915-6080

Brainerd, MN | 701-281-1390

Eau Claire, WI | 715-836-9301

Rochester, MN | 507-285-1200

Woodbury, MN | 651-704-9939

Duluth, MN | 763-443-6291

Fargo, ND | 701-281-1390

Your Building Industry Association. As your leading homebuilding industry association and the voice of builders, remodelers, and suppliers, we are your partner in growing your business and strengthening the industry. Housing First Minnesota provides valuable resources, products, and services designed to give our members a competitive edge and help them enhance their profitability.

EXCLUSIVE OFFER

for Housing Industry News readers

Join by May 31 with promo code ‘HIN422OFFER’ to waive the $95 application fee and receive two free tickets to our connections event at the Minnesota United FC game on July 13. 100% MONEY-BACK GUARANTEE We’re so confident that your business will gain value from membership that we will offer you a 100% money-back guarantee if you are dissatisfied* *If after your first year you don’t see the value of your membership, we will refund your dues! All that we ask is that you participate in two of our events.

Join us today!

JoinHousingFirstMN.org

Your Building Industry Association

HOUSING INDUSTRY NEWS

| 17

INDUSTRY GIVES BACK

Project Build Minnesota student explorers tour the industry Launched in September 2021, Project Build Minnesota partnered with the Scouts to form the Construction Trades Explorers Post as a pilot program to expose youth to the variety of careers available in the trades. Working alongside association partners and industry firms, the program has given youth unique hands-on learning experiences. Participating youth attend metro-area high schools and meet one Saturday a month to visit various sites across the Twin Cities. In January and February, the Explorers learned about safety on the job from The Builders Group and received a personal tour of a Streeter Custom Homes home under construction. "I strongly believe that young people need to know that

not everybody needs to automatically go to college after high school," said Kirk Van Slooten of Streeter Custom Homes. "There are alternatives that lead to a successful career. Plumbers, electricians, and mechanics all make a very good living wage and are careers to be proud of." “We are so grateful to our partners and the adult volunteers who have given up Saturday mornings to work with this group of students,” said Dan Beaving, president of Project Build Minnesota. “You can see the spark and interest these hands-on experiences are creating for these young explorers.” If you are interested in showcasing your firm’s work through this program, please reach out to info@projectbuildmn.org.

Construction Trades Explorer Post 2021-2022 Schedule MONTH

CAREER/TOPIC

PARTNERS

SEPT.

Concrete and masonry

D&S Concrete and Masonry

OCT.

Commercial construction

ABC of MN/ND, Bauer Design Build

NOV.

Planning your career in the trades

Project Build Minnesota

JAN.

Safety in construction

The Builders Group (TBG)

FEB.

Residential construction careers

Housing First Minnesota, Streeter Custom Homes

APR.

Landscape and nursery careers

Minnesota Nursery and Landscape Association, Malmborg’s Garden Center

APR.

Trades show and tell

Minnesota Utility Contractors Association

MAY

Lumber and materials careers

Northwest Lumber Association

Streeter Custom Homes gives students a tour of the job site.

MINNESOTA'S LEADER IN PROVIDING

PREFABRICATED BUILDING MATERIALS

A PPROVEN ROVEN COMPONENT COMPONENT SYSTEM. SYSTEM. WITH OVER 40 YEARS DEDICATED TO LEADING INDUSTRY STANDARDS, WE HAVE PERFECTED THE PROCESS OF PROVIDING PREFABRICATED BUILDING MATERIALS FOR FRAMING CONSTRUCTION.

WALL & FLOOR PANELS | TRUSSES | EWP PACKAGES | LOOSE LUMBER PACKAGES | ONSITE INSTALLATION

18 |

HOUSING INDUSTRY NEWS

IN THE DIRT

A quick recap of housing news and development updates

SOURCE: M/I HOMES

SOURCE: FINANCE AND COMMERCE

SOURCE: LENNAR

M/I Homes to bring 900 homes to the marketplace in five metro cities

More housing at 50th and France

Lennar plans to bring 154 townhomes to Maple Grove

As the dire need for more housing units in Minnesota continues, M/I Homes announced in a press release that it plans to bring 900 units, including townhomes, single-family houses, twin homes and villas, to Blaine, Delano, Corcoran, Shakopee and Minnetrista. “By opening these five communities, each with multiple product offerings and needs, we are striving to fill the gap in the market and provide more housing choices for the consumer,” stated John Rask, vice president of land for M/I Homes’ Minneapolis division, in a statement. M/I Homes came in second on Housing First Minnesota’s list of Top 25 Builders of 2021, delivering an impressive 816 units throughout the year.

STAY INFORMED WITH THE LATEST HOUSING NEWS

Lake Harriet Christian Church sold its property at 5009 Beard Avenue in February. Yellow Tree Development, a local developer, plans to demolish the two-story church and transform the space into a mix of apartments and commercial space. This will be at least the fourth housing project in the works for the 50th and France area, solidifying this neighborhood as a hot spot for developers in recent months. According to a city staff report, the proposal calls for 1,500 square feet of commercial space, 65 enclosed parking stalls and 61 market-rate apartments, which provides the most units of any of the projects in the area. The Minneapolis Planning Commission Committee reviewed the proposal at the end of March.

HousingFirstMinnesota

@HousingFirstMN

Lennar Corporation will be building 72 townhomes in Maple Grove, and they hope to add an additional 82 townhomes to their already approved project for a total of 154 market-rate units in the new Weston Commons neighborhood. The three-bedroom, two-bathroom townhomes sized between 1,700-1,800 square feet will be sold starting at $350,000. Some are slated for rentals as well. City officials have slowed the process due to concerns over the ratio of rental properties, making the blanket assumption that renters don’t take as good of care of property as owners do. However, all 154 properties will be under the same homeowner’s association. “Lennar wants to be able to offer another attainable option," said Paul Tabon, a representative for Lennar, in the planning commission meeting. As housing prices continue to soar, we continue to see creative options from developers to try and bring more starter homes into the market.

Attorneys At Your Convenience

mncls.com · (651) 484-4412 SIGN UP TO BE A PART OF THE HOUSING MOVEMENT • HOUSINGINDUSTRYNEWS.ORG

HOUSING INDUSTRY NEWS

| 19

A JOB WELL DONE! We’ve worked hard to reach our 125year anniversary and take pride in the reputation we’ve earned for top-notch customer service. Our customers may never see him, but individuals like Joe are behind the scenes making it all happen. Joe has been with Lyman for nine years and serves as our operations lead. He’s responsible for keeping product moving in and out of the yards. It’s a fast-paced job that requires quick thinking and problem-solving, but Joe takes it all in stride. “I love the culture, sense of belonging and opportunities for growth”, he shares. Joe, we appreciate your dedication and couldn’t do it without you!

WANT TO JOIN THE TEAM? Visit LymanCareers.com & change your future today! 20 |

HOUSING INDUSTRY NEWS