8 minute read
Advocacy in Action
2021 Success, Looking Ahead in 2022
In an industry as large and impactful as housing, there is never a shortage of pressing industry issues. In this regard, 2021 was right on schedule with a host of supply, regulatory, and legal issues. I’m pleased to report that Housing First Minnesota successfully protected our industry by limiting cost drivers that unnecessarily drive home prices for your customers, homeowners across our region. We also found great success in advancing the unifying message of growing homeownership opportunities for all Minnesotans. This is reflected in the media’s coverage of housing issues as well as the growing conversation about the importance of homeownership in our state.
The legislative session in 2021 brought affordability and housing supply issues to the forefront in a new and powerful way. The Minnesota Senate’s bipartisan advancement of zoning and permitting modernization was a high point in the ongoing discussion on how to fix Minnesota’s housing supply problem. On the affordability front, the annual pushes for new impact fees were met with a sharp and sustained skepticism from legislators, resulting in the stoppage of new transportation impact fees and park fee expansion for housing developments. In the regulatory space, the electrical code was challenged and the Lead Renovation, Repair and Painting (RRP) Rule continued its long trip through the rulemaking process. Housing First Minnesota’s work to ensure that these rules are balanced to account for costs and implementation has improved them immensely. Beyond this, our work to engage other organizations in these regulatory discussions has been critically important. Rounding out this work is the technical work surrounding the building permit issues that have emerged over the past few years. Concerns about overpriced permit and plan review processes by local governments has garnered the attention of regulators who are attempting find a better balance. Rounding out the year has been the initiation of legal challenges to the permit surpluses reported by the cities of Corcoran and Dayton. On the affordability front, the Commission on Housing Affordability has met several times to advance the discussion. A comprehensive zoning modernization initiative is taking shape and will likely be the centerpiece of the 2022 housing discussion. By design, the legislative and regulatory process is slow and deliberate, but there is no mistaking the shift and quickening pace in the housing discussion in St. Paul. The membership and work of Housing First Minnesota are at the leading edge of this discussion. As we look forward in 2022, we are thankful for the industry volunteers who drive and support our professional staff in this critical work on behalf of the members of our industry. Onward,
JAMES VAGLE
VICE PRESIDENT OF ADVOCACY, HOUSING FIRST MINNESOTA
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@HFMNAdvocacy
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ADVOCACY IN ACTION
So-Long Air Gap
More than three years ago, Housing First Minnesota called on the Minnesota Plumbing Board to eliminate the dishwasher air gap mandate for residential dishwashers.
In December 2021, after a lengthy rulemaking process, the air gap mandate disappeared in the new Minnesota Plumbing code. In lieu of the air gap, the old looped method has been reinstated as an option.
Development Rules
In October 2021, developer members from Housing First Minnesota met with staff from the Environmental Quality Board to outline concerns over increased environmental review study requirements. These studies, which can cost up to $50,000 per project, cannot be used to approve or deny a project, raising questions about the need for these studies.
The proposal also opens a back door for local governments to mandate climate change offsets in the Planned Unit Development (PUD) process. Housing First Minnesota had previously offered to organize such a meeting in Q1 of the year. It wasn’t until comments from Housing First Minnesota opposing the expansion of these reviews that the agency decided to meet with developers.
Remodeler and Renovator Advocacy
Housing First Minnesota continues to lead on keeping remodeling safe and affordable.
A proposal from the Minnesota Pollution Control Agency (MPCA) could pave the way for local governments to mandate renovations and create and follow a project-specific reuse plan that avoids traditional demolition. Aside from the MPCA waste diversion program, the Minnesota Department of Health (MDH) continues its work on taking local control of the EPA’s RRP Rule.
In October 2021, Housing First Minnesota called on MDH to halt work on the proposal after MDH admitted this proposal will increase remodeling costs without increasing safety. MDH then released a new version of the rule, its third of the year, on Nov. 16, 2021. The latest version of the rule includes new items never seen before that bring questions about end-of-business operations into question. As written, a remodeler would need to find a “records custodian” to maintain records for up to five years. Housing First Minnesota’s RRP Rule advocacy efforts directly led to a stakeholder meeting in September 2021, the first such meeting in more than four years.
Advocacy Efforts Lead to DLI Technical Review
The Minnesota Department of Labor and Industry’s Building Code Technical Advisory Group (TAG) is meeting to review. Nick Erickson, director of research and regulatory affairs for Housing First Minnesota, is one of the TAG appointees. The TAG agenda includes a review of the Comprehensive Housing Affordability Act, a five-year energy code payback requirement and a square footage-based building permit fee structure for new homes.
This TAG was formed in direct response to Housing First Minnesota’s advocacy efforts over the past several legislative sessions. The TAG concluded its work in December and will issue a report to the state’s Construction Code Advisory Council in January 2022.
LEGISLATIVE UPDATE
Legislative Commission on Housing Affordability Gets to Work
In 2019, the legislature created a first-ofits-kind legislative bipartisan, bicameral commission on housing affordability in hopes of addressing the many facets of housing policy. While the urgency of the pandemic put meetings on hold for over a year, the commission has reconvened four times in the past few months and plans to continue meeting before the 2022 legislative session begins on January 31. Each session has had a different theme so far. In September 2021, the commission focused on the housing affordability bill from Rep. Steve Elkins (DFL-Bloomington). While introducing his bill, Elkins said, “My legislative assistant bought a home in Minneapolis: 1,500 square feet, one parking space, and vinyl siding on 1/9th of an acre lot for $305,000. Why shouldn’t it be legal to build a new home like this, today, in a developing community?” “I appear before you today with a message of urgency,” said David Siegel, executive director of Housing First Minnesota, during the two-hour hearing. “We must act with purpose on comprehensive housing policy modernization with the goal of advancing recommendations to the legislature in the 2022 session. We haven’t built enough homes for nearly 15 years, and our problems are driven primarily by the vanished starter home in our state. A housing market cannot function properly without the steady supply of new and existing starter homes.” In October 2021, legislators heard from a slate of speakers to sift through the data and asked for possible solutions. Testifiers from the Minneapolis Association of REALTORS® (MAR), Zillow, the Minneapolis Federal Reserve, and Zonda all gave presentations on the current Minnesota housing market. Throughout the conversation, the need for zoning and permitting reform was mentioned as one of the top-tier solutions to supply woes. David Arbit, an economist for MAR, highlighted how the lack of supply is causing double-digit price growth across the metro for two straight years, calling the inventory shortage a game of musical chairs. Arbit said that some homebuyers would otherwise be willing to sell, but they want to have a place to sit when the music stops. Libby Starling with the Minneapolis Federal Reserve highlighted the need for a holistic approach to bring more desperately needed inventory to the market. Starling’s solutions included changes to zoning, modular housing, reviewing the state building code, changes to property taxes, expediting permitting and approvals, and reducing fees. Finally, Danielle Leach with Zonda focused on new home construction and the substantial cost increases over the past decade. She discussed the lack of developed lots as well as the local mandates that add to the costs of a home such as luxury exterior mandates like stone exteriors and architectural designs. For its November 2021 meeting, testifiers from Greater Minnesota came forward to describe the housing pains they are feeling. David Dunn, housing director of the Olmsted County Housing and Redevelopment Authority, shared how the lack of new homes being built in Rochester is having a profound impact on the opportunities for homeownership in the region. Additionally, he cited how starter home values are “soaring,” pricing families out. Rep. Shane Mekeland (R–Clear Lake) agreed, emphasizing the need to build more modest single-family homes throughout the state. In response to the testimony presented throughout the meeting, Sen. Rich Draheim (R–Madison Lake) stated, “The free market is there, and they want to build. The best thing we can do is get out of the way and let them build.”
