Senate Adds Problematic Housing Preemption Amendment to Bill Providing Needed Housing Funds

May 26, 2020

In the last hours before the end of the regular session, the Senate sent a bill to the House with a concerning housing amendment included.

On May 17 — with only hours left in the regular session — the Senate took up HF 2542 (Sen. Bill Weber, R-Luverne), which was originally a bill to make modifications to Housing Infrastructure Bond and Housing Finance Agency tax credit allocations.

Sen. Rich Draheim (R-Madison Lake) spoke to, and the Senate included, an amendment that would have provided $100 million for housing infrastructure bonding and $100 million in emergency housing assistance, but also included the following local control preemption provisions:

  • Limitation on city zoning and planning authority. A proposed provision expressly preempted local control by prohibiting cities from conditioning the approval of a planned unit development, subdivision development, or building permit on the use of any specific materials, design, amenities, or other aesthetic conditions that are not required in the State Building Code.
  • Stopping progress on energy efficiency in buildings. Another provision effectively prohibited any new energy codes unless there is legislative approval or the cost savings due to the change in energy code offset the cost of the change within five years.
  • Prohibition of city housing application late fees. A proposed provision prohibited cities from assessing late fees to nonprofits when applying for local housing resources. The League is unaware of any city doing this.
  • Encouragement of unsubsidized affordable housing in comprehensive planning. Cities would be encouraged to include unsubsidized affordable housing in their planning, including smaller lot sizes for single family homes, zoning for duplexes through fourplexes in otherwise single-family zones, and allowance for mixed-use development.
  • Changes to the Department of Labor and Industry (DLI) Municipal Construction and Development Fee Revenue and Expenses Annual Report form. Cities would have been required to report labor, transportation, office space, and other expenses for building permits. The trigger for reporting this information would have been increased from $5,000 to $7,000. Cities that do not reach the $7,000 threshold would still have to indicate as such on the revised form and submit it to DLI. The League has previously worked with DLI to administratively address this form.

Many of these provisions were heard earlier in the regular session. The League took a position opposing provisions that were problematic for cities.

Other provisions

The amendment also included:

  • Legislative approval for the State Building Code.
  • Single-family homes and naturally occurring affordable housing as eligible uses for housing infrastructure bonding.
  • Changes to Minnesota Housing Finance Agency protocol.
  • Crimes created for assistance fraud.
  • Single-family home exclusion for window fall prevention.
  • Manufactured home changes.

City advocacy

The League, Metro Cities, Municipal Legislative Commission, Coalition of Greater Minnesota Cities, and Minnesota Association of Small Cities jointly opposed the provisions that were problematic for cities.

The public wasn’t able to see the amendment before its late-night inclusion in the bill, but the League heard about the problematic language. Therefore, all the city organizations contacted the House and Senate leadership and sent letters to express their concerns.

Although the House didn’t have time to take up the amended bill, it is expected to be considered during an upcoming special legislative session.