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Legislative Update: Special Session Concludes, Groundwork Laid for Pro-Housing Reform

June 10, 2025 By Grace Greene

Minnesota’s 2025 legislative work has officially concluded. While the session began with uncertainty and required an extended special session to wrap up, it marked an important chapter in the growing movement for housing reform across the state. Although sweeping policy changes were not achieved this year, significant groundwork was laid for future success—and it was the unified voice of our industry that made that progress possible.

Momentum Builds Around Zoning and Land-Use Reform

This year, Housing First Minnesota and its partners in the Yes to Homes Coalition brought unprecedented visibility and energy to the issues of zoning and land-use reform. As a founding member of the coalition, Housing First led efforts to break down barriers to building affordable starter homes and closing Minnesota’s growing homeownership gap.

At the center of these efforts was the Minnesota Starter Home Act—a bipartisan proposal backed by key housing committee chairs in both chambers. The bill sparked extensive debate and pieces of it remained in play until the final hours of the session. Ultimately, the legislature and Governor Walz took the easiest path by maintaining the status quo.

Nevertheless, the conversation has undeniably shifted. Lawmakers are increasingly hearing from constituents who want meaningful housing solutions—and that shift is due in no small part to the advocacy and engagement of our members.

Tangible Policy Wins for the Housing and Construction Sectors

While major policy reforms stalled, the session delivered several notable victories for Minnesota’s housing and construction industries:

Regulatory Stability: For the first time in three years, no new labor or environmental mandates were enacted. This regulatory reprieve offers welcome stability to an industry that has long faced an evolving patchwork of new requirements.
Construction Worker Mental Health Funding: Dedicated funding was secured to support mental health services for construction workers, a crucial investment in workforce well-being.
Inspection Fee Adjustments: Modest increases to plumbing and electrical inspection fees—unchanged for nearly 20 years—were approved, balancing funding needs for important services with affordability for builders and homeowners.
Lobbying Clarification: Many builders and experts who speak at public meetings, such as city council hearings, are now clearly exempt from lobbyist classification. This ensures that professionals can advocate for projects without facing additional compliance hurdles.
Pro-Housing Incentives: The state can now prioritize pro-housing municipalities when awarding competitive development funds. Cities that allow multifamily housing, townhomes, accessory dwelling units (ADUs), and reduce excessive mandates like parking minimums will receive preference for state-backed incentives—a strategic “carrot” approach that rewards innovation.
CIC/HOA Oversight: Legislation established a new oversight mechanism for Common Interest Communities (CICs), including a state ombudsperson and registration with the Department of Commerce, offering greater transparency for homeowners.
Key Replacement Fix: Legislation was passed to reverse a 2023 law that would have prevented homeowners from replacing lost or broken keys—a small but essential fix that ensures Minnesotans can access their homes.

Bipartisan Support for Reform Grows

Throughout the session, lawmakers from both parties echoed what our members have long known: Minnesota’s housing crisis cannot be solved without reforming outdated zoning and land-use policies.

Rep. Jim Nash called out the entrenched “culture of no” that stifles new development and emphasized the need to remove regulatory roadblocks.
Rep. Mike Howard stressed that public dollars alone won’t solve the shortage, highlighting the need for structural policy changes.
Rep. Spencer Igo drew attention to the growing affordability gap and reaffirmed that zoning reform is the next essential step in addressing the state’s housing crisis.

Looking Ahead to 2026

All of these achievements—both large and small—reflect the strength, unity, and persistence of Minnesota’s housing industry. Your membership in Housing First Minnesota gives our industry a powerful voice in shaping state policy, protecting our interests, and building a better housing environment for every Minnesotan.

As we turn our sights to the interim and 2026 legislative session, the foundation laid this year positions us strongly to push for the reforms we need. Together, we will continue to advocate for housing opportunity, affordability, and choice across our state.

2025 Session Media Roundup