Housing First Minnesota leaders hosted a mid-session legislative update for members on April 6. The virtual Town Hall highlighted the status of several legislative initiatives and their potential impact on businesses and homeowner costs.
Speakers included James Vagle, CEO of Housing First Minnesota; Mark Foster, vice president of legislative and political affairs; Nick Erickson, senior director of housing policy; and Tony Wiener, chair of the advocacy committee. They discussed this session’s many proposals that would have major effects on housing, including changes to the general contractor-subcontractor relationship, the creation of a new street impact, zoning modernization efforts, and more.
“This year, the legislature has advanced many bills that have the potential to impact the industry and unfortunately, some of them in a very negative way,” said Foster. “But on many of the issues, real progress has been made and we will continue to work with legislators on behalf of the industry for the remaining two months of the legislative session.”
Housing Policy – Bills to Watch
HF 2235 (Elkins) | Legalize Affordable Housing Act
This bill addresses several key areas where Minnesota’s housing policies are increasing costs and preventing the creation of needed starter homes. It has many provisions that would lift unnecessary roadblocks, strengthen our housing market, increase housing affordability, and make Minnesota more competitive in the region.
HF 1859 (Feist) /SF 1988 (Seeberger) | Subcontractor Wage Enforcement Expansion
This bill would completely upend the relationship between general contractors and subcontractors. It has the potential to significantly disrupt the housing industry and subsequently the housing supply of the entire state. Additionally, it would likely hamper entrepreneurship opportunities and force businesses to consider moving their work to neighboring states. Finally, the constitutionality of this bill is questionable.
HF 772 (Kraft) / SF 1368 (Port) | Energy Code Expansion
A bill that has the potential to create energy code chaos. This bill was originally drafted to modify the adoption process for the energy code for new commercial buildings. But, an amendment on the House side has since been adopted have expanded the scope of the bill to include the residential code.
HF 1402 (Hanson) / SF 1146 (Carlson) | Street Impact Fees, New Homeownership Tax
This is a topic the industry has been engaged in for many years following the landmark ruling in Woodbury v. Harstad that ruled cities do not have the authority to charge this homeownership tax. This bill has the potential to raise the cost of housing by $5,000-$10,000 per house. The House Transportation Committee heard this bill, but the Senate did not hear the bill, meaning the language has not met the necessary legislative deadlines.
HF 685 (Agbaje) / SF 365 (Boldon) | Single-Family Rental Construction Ban
There are many concerns with this bill:
- Bans new single-family rental construction without addressing subdivisions already approved.
- Bans new duplex and triplex construction unless one unit is homesteaded or the entity qualifies as exempt.
- Provides builders fewer options when buyers cancel the purchased home already under construction.
- Enacts market restrictions that can have unintended consequences.
- Investors often purchase properties that require significant improvements.
- Lacks any strategy on addressing how to fill the gap in the production of homes.
Each chamber has heard the bill in committee, but it appears as though there will not be much more discussion around this subject for the remainder of the legislative session.
HF 2164 (Kraft)/SF 2735 (McEwen) | Contractor Recovery Fund
As originally drafted, this bill would’ve allowed the contractor recovery fund to be utilized for claims against solar installers going back to 2016, despite these contractors not paying into the fund. Housing First Minnesota worked with the legislative authors to adjust the language so that solar contractors will pay in going forward, but the fund will not be used retroactively.
General Business
Paid Leave Program and Sick Leave Requirements
If signed into law, businesses of all sizes would see a $1 billion tax increase to be paid by employers and employees to fund a statewide paid family and medical leave insurance program. Additionally, all employers would be required to offer up to 24 weeks of paid leave to employees – 12 weeks for paid family leave and 12 weeks of medical leave each year.
While the end goal is admirable, these legislative proposals would have significant impacts on the ability of businesses to determine benefit offerings and leave. We also know that the vast majority of businesses already offer some form of paid leave. These decisions are best left to you as an employer and not the state government.
Moreover, these bills as written are simply not tenable for employers. HF2/SF2 would create a new, mandatory 24-week paid leave program for all Minnesota employers and employees. This would make it nearly impossible to find replacement workers given the state’s historic worker shortage. Additionally, SF 34/HF19 would require costly new sick and safe time requirements.
Your Housing First Minnesota advocacy team will continue to work with the legislature to advance proposals that will help provide more homeownership opportunities for all Minnesotans, while also working to combat legislation that would harm housing.
If you’d like to stay connected, text HOUSINGFIRST to 52886.
