A special five-justice panel from the Minnesota Supreme Court will hear Housing First Minnesota’s lawsuits against the cities of Corcoran and Dayton about building permit overcharges. Current Minnesota Supreme Court Associate Justices Gordon Moore III and Karl Procaccini will join retired justices G. Barry Anderson, Chris Dietzen, and Sam Hanson.
Housing First Minnesota submitted its first brief to the court on Thursday, Sept. 24, laying out both the factual and legal arguments for this next stage of the case:
As interpreted by the Department of Labor & Industry (“DLI”) Code Adoption Guide, building permit fees are a ‘fee for service,’ and as such, they must be commensurate with the services being provided.” Housing First presented unrebutted evidence that the Cities have improperly and illegally used building permit fees as profit-generating centers to shore up general city finances and fund infrastructure projects unrelated to state building code enforcement.
Housing First MN Brief, Submitted Sept. 24, 2026
On Wednesday, Sept. 23, the Minnesota Supreme Court approved the application of four organizations to support Housing First through friend-of-the-court briefs. The libertarian-leaning public interest law firm Institute for Justice will submit a brief in support of Housing First Minnesota, as will the Minnesota chapter of the American Civil Liberties Union (ACLU). The Builders Association of Minnesota and NARI-MN have also joined on a brief supporting Housing First Minnesota.
The hearing has not yet been scheduled and is likely to happen early next year. Bryan Huntington of Larkin Hoffman is representing Housing First Minnesota in the case.
Background
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 with state law and refund new-home buyers overcharged 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 the issue was outside its scope.
The cases have since been consolidated and are moving through the state’s courts.
Members with questions about this should contact Nick Erickson, senior director of housing policy.
