Following release of report on building permit fees, Sen. Draheim to hold committee hearing on topic

Following the release of a report from the Housing Affordability Institute detailing numerous concerns across Minnesota with municipal building permits and a lack of required reporting, Senator Rich Draheim will chair a hearing of the Senate Select Committee on Home Ownership Affordability and Availability focusing on the topic. Specifically, the report reveals that from 2014-17, only 108 Minnesota municipalities filed annual reports with the Minnesota Department of Labor and Industry concerning the building fees they charge, an action required by state law for all municipalities who charge permit fees. Further, of those cities who actually filed their required reports, they generated $78 million in excess revenue from these fees from 2014-18, a direct violation of state law. State statute permits cities to charge these fees, provided they are “fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed.”

“It is no secret: Minnesota lacks affordable home ownership opportunities across the state,” said Senator Draheim, chair of the Senate Select Committee on Home Ownership Affordability and Availability. “It has been said that for every $1,000 increase in the cost of housing, 4,000 individuals are priced out of the market. Anything that artificially drives up the cost of housing, such as excessive permit fees, further increases that problem. Cities should not use these fees as an extra source of revenue.”

The next meeting of Senate Select Committee on Home Ownership Affordability and Availability will take place in St. Paul on September 10, 2019.