On Thursday, HF 1538 passed the Minnesota Senate with a bi-partisan vote of 61-3 on the Senate Floor. The bill provides common-sense changes aimed at increasing the available inventory of multi-family housing, which serve as an onramp to homeownership for many Minnesota families.
Background:
HF 1538 presents several common-sense provisions which will restore confidence in Minnesota’s multi-family housing segment, which is substantially under-performing due to litigation risks for developers, designers, lenders, and insurers. This has impacted the most affordable home options and is damaging our housing market in cities across Minnesota. This is illustrated by the following:
- Multi-Family Development Options are Scarce: A decade ago over 55% of the new homes built in the MSP market were townhomes or condos. Today, that market segment has fallen to just 15%. This disrupts the market and limits choices for homeowners.
- Multi-Family homes are the most affordable option: In 2006, 70% of the homes were built at price-points under $350,000. Today, just 30% of homes are built for less than $350,000.
- Lack of Housing Options Impact all Local Markets- The issue is not isolated to the urban core sub-markets, it impacts housing markets in the suburbs, exurbs, and throughout Greater Minnesota.
Solution:
Helps address the challenges facing multi-housing ownership opportunities by proposal several common-sense changes:
- First and foremost, HF 1538 protects individual homeowner’s rights under Minnesota’s statutory Home Warranty Law.
- A preventative maintenance plan must be adopted and implemented.
- Requires that Homeowners Associations disclose to its members any alleged defects.
- Mediation would be required as a cost effective and preferred method of dispute resolution before legal action.
- Requires a majority of the homeowner association members to approve the decision to commence a legal action.
The bill has a number of differences when compared to the version which passed the House of Representatives with a strong 108 bipartisan votes. These differences will likely be reconciled in a conference committee as the legislature moves towards its Monday night adjournment deadline.
