Lawmakers return to St. Paul on Feb. 17 for the second year of the biennium, with adjournment likely set for mid-May. With all legislative seats on the ballot in November, the session will be shaped by election-year urgency and tight partisan margins. The House remains tied 67-67, while the Senate holds a narrow DFL majority. In this environment, bipartisan targeted housing reforms have the best chance to advance.
Minnesota’s persistent housing shortage, rising home prices, and regulatory obstacles kept housing front and center in 2025—and that momentum rolls into 2026. Lawmakers have a strong foundation from last session’s debates on zoning modernization, building permit fee reform, and housing infrastructure investments.
What an election year means
With control of both chambers at stake, lawmakers will be especially responsive to local constituents. Member engagement will be crucial: personal stories, real-world project examples, and direct outreach to legislators can meaningfully shape outcomes.
“As we head into the 2026 session, lawmakers need to hear clearly that every dollar added in fees, mandates, or delays is a dollar taken away from a Minnesota family’s ability to own a home,” says Mark Foster, vice president of legislative & political affairs for Housing First Minnesota. “Our members are ready to partner with legislators on both sides of the aisle to advance practical, pro-housing solutions.
Housing First Minnesota’s role
Throughout the 2026 session, Housing First Minnesota will:
- Advocate for policies that lower regulatory costs and expand homeownership opportunities.
- Oppose new cost drivers and excessive mandates.
- Highlight legislative housing champions.
- Provide members with timely updates and action alerts.
Looking ahead
Minnesota’s housing challenges are significant—but so is the urgency to act. With strong advocacy and member engagement, the 2026 session offers a key opportunity to deliver meaningful progress on housing affordability and supply.
Housing First advocacy and member engagement continue to impact regulatory decisions
Minnesota’s regulatory landscape saw major movement this year, and the voices of Housing First Minnesota members played a decisive role as the Construction Code Advisory Council (CCAC), Plumbing Board, Board of Electricity, and Public Utilities Commission (PUC) considered proposals with significant implications for housing affordability. These discussions highlight why our industry’s leadership and unified advocacy remain essential in protecting Minnesotans’ ability to achieve homeownership.
Builders’ concerns drive conversation at CCAC review
During the CCAC’s Nov. 14 review of several residential code amendments, Housing First Minnesota staff, members, and builder association partners made their concerns clear: Minnesota’s affordability crisis cannot withstand additional regulatory cost increases.
Members from across the state shared direct testimony through written comments. One Rochester Area Builders member emphasized that “every new regulation, no matter how well-intentioned, adds up.” A small builder from the Central Minnesota Builders Association echoed the cumulative impact of new code mandates, warning that even well-meaning changes can push homeownership further out of reach.
The message resonated. Many of the proposed Technical Advisory Group (TAG) amendments, which would have increased the cost of building a typical two-story home by nearly $15,000, were not approved by the Council. While this decision represents a temporary reprieve for homeowners and builders, Housing First cautions the pressure is far from over.
“Housing First Minnesota members made a strong case on affordability, and CCAC listened,” says Nick Erickson, senior director of housing policy for Housing First Minnesota. “But with the Mitchell Provisions still in place, these cost increases will resurface every three years through 2036 unless the Legislature acts.”
One of the most-watched proposals would have required EV-charging capability in all new homes. This proposal was again rejected by the Council in a decisive 2-16 vote, marking the third time the measure has failed to advance.
Plumbing and electrical reviews continue into 2026
In October, the Minnesota Plumbing Board approved the technical review for chapters 1-4 of the 2024 Uniform Plumbing Code while continuing work on proposed rules for nonpotable water reuse. With environmental goals and public health concerns in tension, this conversation is expected to continue into 2026.
Meanwhile, the Board of Electricity has begun its review of the 2026 National Electrical Code, meeting twice this fall. Housing First Minnesota continues to monitor these proceedings to ensure that future code updates support, rather than hinder, housing affordability.
Update on legal challenges
Across Minnesota’s courts and regulatory agencies, critical legal decisions are unfolding that directly impact how our industry builds homes and serves Minnesota families. Housing First Minnesota and its members have been at the center of these discussions to provide expertise, defend affordability, and ensure government accountability on behalf of the state’s homebuilding community.
Court of Appeals rules DLI enforced an unpromulgated rule
A recent Minnesota Court of Appeals decision brought long-standing builder concerns into sharp focus: What exactly does the building code require and how should it be enforced?
In October, the Court determined that the Minnesota Department of Labor and Industry (DLI) enforced an airflow requirement that had never gone through the formal rulemaking process required under state law. While nonprecedential, the ruling reinforces a message our members have championed for years: Code requirements must be clear, transparent, and properly adopted.
The case involved building official Todd Geske of MetroWest Inspections. DLI alleged he should have enforced a ±10% airflow-balancing tolerance under the Minnesota Mechanical Code. Geske applied the widely recognized ACCA Standard 5, a ±20% tolerance that is consistent with industry practice.
An administrative law judge upheld DLI’s view in 2023, but Geske appealed. The Court sided with him, finding DLI’s interpretation amounted to an unpromulgated rule.
This decision supports the industry’s long-held understanding of airflow standards and helps prevent inconsistent enforcement across jurisdictions, protecting members from unpredictable enforcement practices that drive up costs and delay projects.
Housing First Minnesota supported the case through an amicus brief, underscoring the association’s commitment to defending reasonable, clearly adopted code requirements.
DLI has not announced whether it will appeal.
Worker classification challenge withdrawn after Appeals Court ruling
A federal lawsuit challenging Minnesota’s newly adopted 14-point independent contractor test for the construction industry has been withdrawn.
In October, the Eighth Circuit Court of Appeals upheld the lower court’s ruling in Minnesota Chapter of Associated Builders & Contractors v. Blissenbach, concluding the plaintiffs were unlikely to succeed on constitutional grounds.
With the challenge dismissed, the independent contractor law that was passed in the final hours of the 2024 legislative session remains fully in effect, along with the state’s new civil and criminal penalties for misclassification.
Housing First Minnesota remains actively involved in monitoring compliance impacts and advocating for clarity and fairness in worker classification rules.
Housing First Minnesota returns to court over excessive permit fees
Housing First Minnesota is again before the Minnesota Court of Appeals in its case against the cities of Corcoran and Dayton. This is an effort that has been years in the making to protect builders and homebuyers from excessive building permit fees.
The association argues that both cities violated Minnesota Rule 1300.0160 by inflating permit fees far beyond the actual cost of service, turning them into an unlawful revenue source. A prior 2023 ruling confirmed Housing First Minnesota’s standing to bring the challenge; this new phase focuses squarely on whether the cities’ fee structures violate state law.
A hearing date has not yet been set.
Legislative champions recognized as Housing First Minnesota’s 2025 Legislators of the Year
Housing First Minnesota is proud to recognize Sen. Jordan Rasmusson (R–Fergus Falls) and Rep. Spencer Igo (R–Wabana Township) as the association’s 2025 Legislators of the Year. The leadership of these lawmakers has directly supported our members’ work to expand housing opportunities across Minnesota.
Presented at the annual Building Industry Gala (BIG Night) at Mystic Lake Center, the award celebrates legislators who demonstrate meaningful commitment to reducing regulatory barriers, improving housing affordability, and advancing policies that support Minnesota’s builders, remodelers, and homeowners.
“Sen. Rasmusson and Rep. Igo have been tireless advocates for solutions that reduce barriers, expand housing supply, and keep the dream of homeownership within reach for Minnesotans,” says Foster. “Their results-oriented approach—grounded in affordability, predictability, and common-sense
regulation—embodies the leadership Minnesota needs to address our growing housing shortage.”
New Institute report underscores urgent need for pro-housing reforms in Minnesota
Housing Affordability Institute, the think tank founded by Housing First Minnesota in 2018, has released a new white paper outlining the state’s worsening homeownership decline and the growing consequences of Minnesota’s housing shortage. Featuring insight from nationally recognized economist Elliot Eisenberg, Ph.D., the report underscores the complex market conditions our members navigate daily.
Minnesota, once the Midwest’s homeownership leader, has dropped to a 71% homeownership rate—the lowest standing in more than 15 years. The Institute’s analysis identifies a chronic lack of new home construction as the primary driver of this shift. High construction costs and limited production have pushed demand into the existing home market and the rental market, resulting in escalating prices and fewer attainable options for Minnesota families.
Affordability continues to deteriorate with existing homes now at a median price of $342,625, and the median new home price reaching $526,644. With more than half of Minnesota households unable to afford an existing home and three out of four unable to afford a new one, the path to homeownership is slipping out of reach for many. First-time buyers are entering the market later than ever, with the average age reaching an all-time high of 40 years old.
Construction activity reflects this tightening environment. Since 2021, metro-area housing permits have fallen 43%, and statewide permits are down 35%. This slowdown threatens to expand the state’s current 98,000-home deficit, with wide-ranging economic effects. The Institute estimates that Minnesota has already missed out on $9 billion in economic activity and nearly 63,000 jobs because of its underbuilt
housing stock.
The paper also highlights the pressing needs of Minnesota’s aging population, the significant minority homeownership gap, and shifting demographics among younger households. Together, these trends create a self-reinforcing cycle that makes it harder for Minnesotans to save, rent affordably, or purchase their first home.
“Minnesota’s distinction as the highest-cost housing market in the Midwest, combined with a shortage of new homes, is pushing homeownership further out of reach for future generations, says Housing Affordability Institute Director Nick Erickson. “At the same time, the lack of supply is limiting economic growth, costing the state jobs and billions of dollars in activity.”
The Institute concludes with a clear message: Minnesota must reduce barriers to new construction to remain competitive and ensure that future generations can achieve the benefits of homeownership. For members, the findings reflect what our industry sees firsthand and underscore the essential role our members play in building the homes, communities, and economic strength Minnesota needs.
