Request for Council Action

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Request for Council Action

TO: Mayor and City Council

FROM: Tim Murray, City Administrator

MEETING DATE: March 23, 2021

SUBJECT: Authorize Submittal of Letter in Opposition to

Proposed State Legislation the Limits/Restricts Local Control on Housing and Development Background:

There are several bills currently under consideration in the State Legislature that would limit or restrict local control on housing and development in the city (copies are attached). The mayors from a number of municipalities have submitted letters similar to the one attached in opposition to this legislation. Approval of this item authorizes submittal of the letter from Mayor Voracek to Senator Jasinski and Representative Daniels expressing opposition to the passage of these bills.

Recommendation:

Authorize Submittal of Letter Attachments:

•_Letter

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City Hall * 208 First Avenue N.W. * Faribault, Minnesota 55021-5105 * Phone (507) 334-2222 * Fax (507) 333-0399

AN EQUAL OPPORTUNITY EMPLOYER

-March 23, 2021

Honorable Senator Jasinski and Representative Daniels:

On behalf of the constituents of the city of Faribault, this letter serves to voice our opposition to several legislative initiatives (SF801/HF1085, SF914, and SF915) focused on housing that was heard in committee last week and will be heard through the end of session.

As a collection of preemption legislation, each bill erodes or eliminates the local control entrusted to cities in overseeing the growth and development of their community. A one-size-fits-all approach attacks the fundamental importance of local control and treats every city in the state the exact same regardless of locally identified needs.

The City of Faribault recently adopted an updated Comprehensive Plan, following over two years of effort and consideration. This plan reflect the vision, values, and voices of our citizens. The Comprehensive Plan serves as the foundation guiding the many decisions facing a growing community. The various housing bills would have significant long-term implications for this plan. Any preemption weakening local control lessens our ability to develop in a manner desired by our constituents and consistent with our Comprehensive Plan.

Some might have us believe these legislative proposals will enhance new home affordability. From several perspectives, these bills represent a false narrative:

"Where is the data documenting that legislative change will lower the sales price of a new home? Of course, the data does not exist. Past and current experience has been, not surprisingly, that the price of a home is primarily dictated by the market (supply and demand), and not some artificial reductions made in the cost of construction. Instead, you are being asked to create a legislative change, absent any assurances that it would result in a reduced sales price of a new home.

With growth comes increased costs to a city. The proposed legislation seeks to limit the ability for a city to recoup these costs from whence they came (the development itself). Not having the local control to equitably collect a fee from developers is not an elimination of a cost; it is simply a transfer of a cost to our existing taxpayers.

This legislation would ask us to trade-off the possibility of enhanced affordability for a new home buyer, and at the same time, knowingly decreasing the affordability of housing for our existing homeowners as they will be required to pick up the costs of growth through higher tax levy increases.

Again, the affordability narrative is false. It lacks data, credibility, and seeing any of these legislative proposals into law would serve to raise taxes on our existing citizens!

City Hall * 208 First Avenue N.W. * Faribault, Minnesota 55021-5105 * Phone (507) 334-2222 * Fax (507) 333-0399

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-City Hall * 208 First Avenue N.W. * Faribault, Minnesota 55021-5105 * Phone (507) 334-2222 * Fax (507) 333-0399

AN EQUAL OPPORTUNITY EMPLOYER

-In short, we seek your help. Please let your colleagues in the House and Senate know that you are following this legislation and you are concerned for the implications they hold for the cities in your district.

Thank you in advance for your support, any we would welcome the opportunity of speaking directly with you on the importance of thwarting legislative change preempting local control on growth and development.

Sincerely,

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1.1 A bill for an act

1.2 relating to State Building Code; requiring municipalities to base construction 1.3 permit fees on a cost per square foot; amending Minnesota Statutes 2020, section 1.4 326B.153, by adding a subdivision.

1.5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 Section 1. Minnesota Statutes 2020, section 326B.153, is amended by adding a subdivision 1.7 to read:

1.8 Subd. 1a. Building permit fees; municipalities. Beginning January 1, 2022, fees for 1.9 building permits, including any inspection fees, adopted by a municipality must be based 1.10 on a cost per square foot. All permit and inspection fees must be made available publicly 1.11 through one or more of the following:

1.12 (1) posting on the website of the municipality;

1.13 (2) providing a copy by mail, if requested; or

1.14 (3) keeping a copy for review at the city hall building of a municipality.

1 Section 1.

REVISOR SS/CS 21-00558 12/28/20

State of Minnesota

This Document can be made available in alternative formats upon request

HOUSE OF REPRESENTATIVES

H. F. No.

1085

NINETY-SECOND SESSION

Authored by Stephenson 02/15/2021

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1.2 relating to State Building Code; requiring municipalities to base construction 1.3 permit fees on a cost per square foot; amending Minnesota Statutes 2020, section 1.4 326B.153, by adding a subdivision.

1.6 Section 1. Minnesota Statutes 2020, section 326B.153, is amended by adding a subdivision 1.7 to read:

1.8 Subd. 1a. Building permit fees; municipalities. Beginning January 1, 2022, fees for 1.9 building permits, including any inspection fees, adopted by a municipality must be based 1.10 on a cost per square foot. All permit and inspection fees must be made available publicly 1.11 through one or more of the following:

1.12 (1) posting on the website of the municipality;

1.13 (2) providing a copy by mail, if requested; or

1.14 (3) keeping a copy for review at the city hall building of a municipality.

1 Section 1. 21-00558 as introduced 12/28/20 REVISOR SS/CS

SENATE

STATE OF MINNESOTA

S.F. No. 801

NINETY-SECOND SESSION

(SENATE AUTHORS: KORAN)

OFFICIAL STATUS D-PG

DATE

Introduction and first reading 311

02/11/2021

Referred to Labor and Industry Policy

Withdrawn and re-referred to Housing Finance and Policy 440

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1.2 relating to local government; modifying planning and zoning fees; amending 1.3 Minnesota Statutes 2020, section 462.358, subdivision 2b.

1.5 Section 1. Minnesota Statutes 2020, section 462.358, subdivision 2b, is amended to read:

1.6 Subd. 2b. Dedication. (a) The regulations may require that a reasonable portion of the 1.7 buildable land, as defined by municipal ordinance, of any proposed subdivision be dedicated 1.8 to the public or preserved for public use as streets, roads, sewers, electric, gas, and water 1.9 facilities, storm water drainage and holding areas or ponds and similar utilities and 1.10 improvements, parks, recreational facilities as defined in section 471.191, playgrounds, 1.11 trails, wetlands, or open space. The requirement must be imposed by ordinance or under 1.12 the procedures established in section 462.353, subdivision 4a.

1.13 (b) If a municipality adopts the ordinance or proceeds under section 462.353, subdivision 1.14 4a, as required by paragraph (a), the municipality must adopt a capital improvement budget 1.15 and have a parks and open space plan or have a parks, trails, and open space component in 1.16 its comprehensive plan subject to the terms and conditions in this paragraph and paragraphs 1.17 (c) to (i).

1.18 (c) The municipality may choose to accept a cash fee as set by ordinance from the 1.19 applicant for some or all of the new lots created in the subdivision, based on the average 1.20 fair market value of the unplatted land for which park fees have not already been paid that 1.21 is, no later than at the time of final approval or under the city's adopted comprehensive plan, 1.22 to be served by municipal sanitary sewer and water service or community septic and private 1.23 well as authorized by state law. For purposes of redevelopment on developed land, the

1 Section 1. 21-00680 as introduced 12/18/20 REVISOR MS/EE

SENATE

STATE OF MINNESOTA

S.F. No. 914

NINETY-SECOND SESSION

(SENATE AUTHORS: DRAHEIM, Koran and Duckworth)

DATE

02/11/2021

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2.1 municipality may choose to accept a cash fee based on fair market value of the land no later 2.2 than the time of final approval. The park fee is capped at five percent of the appraised value 2.3 of the land at time of application. "Fair market value" means the value of the land as 2.4 determined by the municipality annually based on tax valuation or other relevant data. If 2.5 the municipality's calculation of valuation is objected to by the applicant, then the value 2.6 shall be as negotiated between the municipality and the applicant, or based on the market 2.7 value as determined by the municipality based on an independent appraisal of land in a 2.8 same or similar land use category. In addition to the cash fee option, fees may be paid by 2.9 donating land, building recreational facilities, or a combination of these options.

2.10 (d) In establishing the portion to be dedicated or preserved or the cash fee, the regulations 2.11 shall give due consideration to the open space, recreational, or common areas and facilities 2.12 open to the public that the applicant proposes to reserve for the subdivision. Municipalities 2.13 may offset fees based on the applicant's proposal to reserve a portion of the land for open 2.14 space or a park, but is not required to accept the applicant's offer. The value of any portion 2.15 dedicated or preserved for park or trail purposes shall be deducted from any cash fee so that 2.16 the applicant is not penalized for including open space, recreational, or common areas and 2.17 facilities in their development proposal.

2.18 (e) The municipality must reasonably determine that it will need to acquire that portion 2.19 of land for the purposes stated in this subdivision as a result of approval of the subdivision.

2.20 (f) Cash payments received must be placed by the municipality in a special fund to be 2.21 used only for the purposes for which the money was obtained. The municipality must 2.22 maintain records detailing the purposes for which the money was obtained and the manner 2.23 in which it was spent to further those purposes. The records must be readily available to the 2.24 public upon request.

2.25 (g) Cash payments received must be used only for the acquisition and development or 2.26 improvement of parks, recreational facilities, playgrounds, trails, wetlands, or open space 2.27 based on the approved park systems plan. Cash payments must not be used for ongoing 2.28 operation or maintenance of parks, recreational facilities, playgrounds, trails, wetlands, or 2.29 open space. The municipality must maintain records demonstrating the manner in which 2.30 each cash payment was used.

2.31 (h) The municipality must not deny the approval of a subdivision based solely on an 2.32 inadequate supply of parks, open spaces, trails, or recreational facilities within the 2.33 municipality.

2 Section 1.

21-00680 as introduced 12/18/20 REVISOR MS/EE

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3.1 (i) Previously subdivided property from which a park dedication has been received, 3.2 being resubdivided with the same number of lots, is exempt from park dedication

3.3 requirements. If, as a result of resubdividing the property, the number of lots is increased, 3.4 then the park dedication or per-lot cash fee must apply only to the net increase of lots.

3 Section 1.

21-00680 as introduced 12/18/20 REVISOR MS/EE

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1.2 relating to local government; limiting municipal planning and zoning controls; 1.3 amending Minnesota Statutes 2020, section 462.352, subdivision 5; proposing 1.4 coding for new law in Minnesota Statutes, chapter 462.

1.6 Section 1. Minnesota Statutes 2020, section 462.352, subdivision 5, is amended to read:

1.7 Subd. 5. Comprehensive municipal plan. (a) "Comprehensive municipal plan" means 1.8 a compilation of policy statements, goals, standards, and maps for guiding the physical, 1.9 social and economic development, both private and public, of the municipality and its 1.10 environs, and may include, but is not limited to, the following: statements of policies, goals, 1.11 standards, a land use plan, including proposed densities for development, a community 1.12 facilities plan, a transportation plan, and recommendations for plan execution. A

1.13 comprehensive plan represents the planning agency's recommendations for the future 1.14 development of the community.

1.15 (b) As part of the comprehensive municipal plan, municipalities are encouraged to enact 1.16 public policy to facilitate the development of unsubsidized affordable housing. These policies 1.17 may include but are not limited to the municipal plan authorizing smaller lot sizes for 1.18 single-family homes, allowing the construction of duplexes through fourplexes on lots that 1.19 would otherwise be zoned exclusively for single-family houses, and allowing for mixed-use 1.20 development. 1 Section 1. S0915-1 1st Engrossment SF915 REVISOR MS

SENATE

STATE OF MINNESOTA

S.F. No. 915

NINETY-SECOND SESSION

(SENATE AUTHORS: DRAHEIM, Koran and Duckworth)

DATE

02/11/2021

Referred to Local Government Policy

Withdrawn and re-referred to Housing Finance and Policy 403

02/15/2021

Comm report: To pass as amended and re-refer to Local Government Policy 768a

03/10/2021

Comm report: To pass 950

03/17/2021

Second reading 954

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2.1 Sec. 2. [462.3575] LIMITING REGULATIONS ON RESIDENTIAL 2.2 DEVELOPMENT.

2.3 Subdivision 1. Application. This section applies to official controls adopted under 2.4 sections 462.357, 462.358, and 462.3595.

2.5 Subd. 2. Planned unit development. (a) A municipality shall not require a planned unit 2.6 development agreement in lieu of a proposed residential development if the proposed 2.7 residential development complies with the existing city zoning ordinances, subdivision 2.8 regulation, or qualifies as a conditional use.

2.9 (b) A municipality shall not require planned unit development agreement conditions 2.10 that exceed the requirements in the State Building Code under chapter 326B.

2.11 (c) A planned unit development agreement must be made available to the public by 2.12 posting the agreement on the website of the municipality at least seven days prior to the 2.13 governing body's review of the agreement. If the municipality does not have a website, a 2.14 copy of the planned unit development agreement must be available for review at the city 2.15 hall building of the municipality. If the agreement is approved by the governing body, the 2.16 agreement cannot be modified unless all parties to the agreement concur.

2.17 Subd. 3. Limitation on aesthetic mandates. A municipality shall not condition approval 2.18 of a building permit, subdivision development, or planned unit development on the use of 2.19 specific materials, design, amenities, or other aesthetic conditions that are not required by 2.20 the State Building Code under chapter 326B.

2.21 Subd. 4. Exception. This section shall not apply to a proposed residential development 2.22 that is to be developed by the municipality itself.

2 Sec. 2.

S0915-1 1st Engrossment SF915 REVISOR MS

Request for Council Action