Judge hears building permit profit lawsuit

new residents for building permit fees and earmarked the profits to build up surplus funds which Minnesota law and agency guidance explicitly prohibit,” said James Vagle, CEO of Housing First Minnesota. “Given the depths of Minnesota’s housing challenges, this is especially troublesome. We look forward to Judge Magill’s decision.”

Builders’ standing questioned

In both hearings, lawyers for the cities challenged Housing First Minnesota’s ability to bring the lawsuit and attempted to dismiss any claims of harm.

Greene Espel PLLP, the law firm representing both cities, argued that Housing First Minnesota lacks standing to bring a suit against these cities on this topic since Housing First Minnesota itself was not harmed by the city’s permit practices.

The cities’ attorneys also argued that since the building permit fees are included in the cost of the home, homebuilders are not harmed by overcharging for building permits.

A decision from Magill could take several months.

Disclosure: Housing First Minnesota, the plaintiff in the case, is the publisher of Housing Industry News.

Minnesota Housing, Met Council sued over placement of subsidized housing

Stairstep Foundation, a faith-based nonprofit organization, is suing two Minnesota government agencies over what it claims is racial discrimination in the agencies' housing policies.

In its brief, the plaintiff claims the housing policies of the defendants, Minnesota Housing and the Met Council, are "knowingly causing and exacerbating residential racial segregation in the Twin Cities" and are concentrating the placement of subsidized housing in less affluent communities that are more likely to be comprised of communities of color.

Stairstep, founded in 1992, says it seeks to implement a "community-institutionbased strategy focused on convening African American churches to work collaboratively to address issues common to their congregations and communities, and to demonstrate the power of unified action."

In its request for relief, Stairstep is seeking that Ramsey County Court declares the Met Council and Minnesota Housing are implementing “land use and subsidized housing policies that create and perpetuate residential racial segregation.”

It is also seeking that the defendants permanently cease employing any “land use and subsidized housing policies that create and perpetuate residential racial segregation.” Stairstep is also seeking attorney's fees.

At the time of publishing, neither Minnesota Housing nor the Met Council made any public comments on the lawsuit, nor did they file any response briefs with Ramsey County Court.

The U.S. Supreme Court released is much-awaited opinion in Sackett v. EPA on May 25, establishing clarity on which wetlands are subject to the Clean Water Act. Sackett establishes a new test on what classifies as “Waters of the United States” (WOTUS), which are subject to expansive federal permitting.

The Sacketts sued the Environmental Protection Agency (EPA) after the federal government determined a wetland on their property, which was not connected to a nearby lake, fell under federal oversight. The Supreme Court found 9-0 that the wetland was errantly classified as falling under the WOTUS rule.

While the nine justices were unanimous in the question of the Sacketts’ wetland, the Court was split on the broader issue of determining which wetlands are subject to the rule.

Court established two-part test

While the Sacketts’ issue started in 2007, this broader issue of which waters fall under federal oversight goes back 50 years.

Writing the majority opinion, Justice Alito noted the long road to get clarity and laid out a test to determine which waters are subject to the WOTUS definition.

An agency seeking to claim oversight must “’first, that the adjacent [body of water constitutes] . . . ‘water[s] of the United States,’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”

Heavily cited in the opinion is Rapanos v. United States, a 2006 Supreme Court case on the WOTUS Rule. That case was expected to bring this issue to a close, instead the nation’s top court was left with a rare tie three-way tie.

“The Sackett ruling brings needed clarity on this issue of which waters fall under federal oversight, ending five decades of confusion,” said Nick Erickson, senior director of housing policy for Housing First Minnesota. “As legal challenges mount and leaders in Washington remain divided on this issue, the housing industry welcomes the clear test the court’s majority established.”

Clarity comes as tensions rise

Despite bipartisan support from Congress, President Biden vetoed congressional action of the WOTUS rule April. Congresses sought to block the more expansive definition of WOTUS the EPA was seeking to implement, similar to the language at issue in Sackett.

Biden cited confusion as the need to veto the resolution.

"Farmers would be left wondering whether artificially irrigated areas remain excluded or not," said Biden. "Construction crews would be left wondering whether their waterfilled gravel pits remain excluded or not. The resolution would also negatively affect tens of millions of United States households that depend on healthy wetlands and streams."

The veto was not welcomed by housing groups who felt the rule needed work.

“To put an end to this regulatory morass, the administration needs to delay implementing this onerous regulation until a judgment is rendered and go back to the drawing board to draft a new, practical and durable WOTUS rule,” said Alicia Huey, chair of NAHB.

EPA looks to the future

“I am disappointed by today’s Supreme Court decision that erodes longstanding clean water protections,” EPA Administrator Michael Regan said in a statement. “The Biden-Harris Administration has worked to establish a durable definition of ‘waters of the United States’ that safeguards our nation’s waters, strengthens economic opportunity, and protects people’s health while providing the clarity and certainty that farmers, ranchers, and landowners deserve. These goals will continue to guide the agency forward as we carefully review the Supreme Court decision and consider next steps.”