On Friday, April 7, Hennepin County Judge Magill heard arguments in Housing First Minnesota’s lawsuits over building permit fees in Corcoran and Dayton.
“As our briefs illustrated and our attorney highlighted in today’s hearing, both the cities of Corcoran and Dayton were overcharging new residents for building permit fees and earmarked the profits to build up surplus funds which Minnesota law and agency guidance explicitly prohibit,” said James Vagle, CEO of Housing First Minnesota. “Given the depths of Minnesota’s housing challenges, this is especially troublesome. We look forward to Judge Magill’s decision.”
From 2018 to 2021, the City of Corcoran collected $2.5 million in building permit profits. The City of Dayton collected $2.9 million in building permit profits from 2018 to 2021, $2.7 million of which was placed into “Fund 409”, which is designed to self-finance municipal development projects.
Under Minnesota law, building permit fees “must be by legal means and must be fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed.” Guidance from the Minnesota Department of Labor and Industry states:
“Building permit applicants should not be charged additional or extra fees to support a municipality’s general fund or other special interest projects undertaken by the municipality.” (Guide to Building Code Administration, MN DLI).
In November 2020, Housing First Minnesota asked the cities of Corcoran and Dayton to align their building permit fees to state law and refund the new-home buyers overcharged by the cities for their building permits.
In March 2021, the State Board of Appeals, a code official panel at the Department of Labor and Industry, dismissed Housing First Minnesota’s attempt to find an administrative remedy. The Board said this issue was out of its scope.
In July 2021, Housing First Minnesota filed suit against both cities, with separate suits brought against each city. Judge Magill heard summary judgment arguments in both cases on April 7, 2023.
Read the briefs: