Zoning for Affordability in Minnesota: Is a Law Allowing More Units Doomed?

A new law to boost starter-home construction in Minnesota is “on life support” now, media reports say. Its backers are scrambling to save it as the lawmaking session concludes this month.

Starter homes seem to be an endangered species. In the early 1980s, four in every ten new homes created were within the reach of first-time deed seekers. Now, not even one in ten new homes is a modest, financially accessible home.

Why? Restrictive zoning is part of the reason.

Sliding Scale of Reforms, Based on City Size

Minnesota’s Starter Homes Act aims to make more kinds of housing available to planners—wherever they might decide to site them. Cities would be able to pick out places where higher density housing makes sense. Under the bill, cities would:

• Permit accessory dwelling units or tiny homes to be added to residential properties.

• Stop certain local design standards (rules mandating porches, minimum garage size, and other requirements that tend to favor bigger houses).

• Loosen certain aesthetic rules and homeowners association (HOA) rules that ratchet up building costs.

The Act’s language also recommends 11 possible zoning changes for city governments to implement, such as dropping minimum parking spaces, and introducing subsidies. Large cities would need to adopt six of the options, and then there’d be a scale downward. Small cities would only be expected to adopt three. And no local government would have to force development into places where infrastructure isn’t up to the task. Areas could be preserved without further building to advance public health, or to support environmental or scenic values.

In short, Minnesotans would get “more homes, more choices and more pathways to stability,” writes Habitat for Humanity. The group says zoning reform is essential to enable volunteers, donated funds, and limited land to serve the needs and goals of working households.

AARP, too, backs the Starter Homes Act as a well-crafted response to the pain caused by exclusionary zoning that sidelines so many hopeful deed holders.

Policy Debate, or Personal Experience?

Last month, the Lakeville, Minnesota council hit the pause button on new home building applications. State Representatives Spencer Igo and Michael Howard publicly expressed concern that this action could erode affordability if other cities follow suit. But Lakeville council member Dan Wolter said it’s just “a minor administrative change” in a city which has already approved three years’ worth of housing creation.

Meanwhile, the people of Minnesota “do not experience our housing shortage as a policy debate,” say Habitat for Humanity organizations across Minnesota.

They experience it when rent rises, and there is nothing left to save for a down payment. They experience it when an older adult wants to downsize but cannot find a smaller home in the community they love. They experience it when a young family is ready to buy their first home but finds nothing within reach.

These Minnesotans remain sidelined when local governments turn away from proposals for gentle density housing. The Starter Homes Act would change that problematic status quo. It’s overdue, Habitat for Humanity believes. Hardly any starter homes can be found in the Minneapolis-St. Paul area. That’s just not workable, in a bustling metropolis that relies on the talents of every kind of worker.

Who’s Afraid of the Starter Homes Act?

But now, the Act has been derailed. This and related zoning reforms have failed to stand up in a House committee meeting, and they’ve missed important Senate deadlines.

Yes, even the Starter Homes Act has been sidelined. And that bill was brought forward with support from both the Republicans and the Democrats. For years, Habitat for Humanity of Minnesota and many others have worked with state lawmakers (and willing local governments) to sculpt the language of this law. Now, the law may be dead on arrival—as has already happened in previous years.

But why would towns fear this bill? It was drawn up deliberately to be user-friendly. It presents a smorgasbord of zoning possibilities for cities and towns to adopt in their own ways.

The Starter Homes Act (written up as House File 3895 and Senate File 4123) states:

• Cities should approve new housing types—duplexes, triplexes, and 8-plexes—in more areas. When modest starter homes, townhouses, duplexes, accessory dwelling units and apartments are all allowed, so are more opportunities.

• Cities should loosen minimum lot size rules for homes. Where communities mainly zone for large homes on large lots, financially accessible homes do not exist.  

But now, those who fear the law are regrouping and backing away from reform.

Where’s the Pushback Coming From?

Some city officials and state legislators say the Act is overreaching on the part of the state government. They say the state shouldn’t be pushing “one-size-fits-all” zoning rules on every local government in the state. They say cutting into local planning authority deprives cities of the ability to responsibly address growth.

And they say it wouldn’t necessarily cool hot markets. Local officials often argue that the real estate market is why homes cost so much—that it’s not the fault of city planners. Basically, they reply: Why should local governments be saddled with paying for the work hours and outside expertise that the new law would impose upon them?

“This legislation would also remove the ability of residents to have a meaningful voice in how their communities develop,” wrote a group of 14 Minnesota mayors to The Minnesota Star Tribune in late April. These 14 city leaders also insist that many cities are already modifying zoning ordinances and codes, incentivizing density, and carrying out other work to promote affordable housing. The Act could disrupt good work in progress, they insist.

And So It Goes…

After extensive debate, public commentaries, and testimony, the Starter Homes Act lost a vote in its first House committee. Seven out of 12 committee members registered “no” votes.

Can the Act, or at least parts of it, be salvaged? The last day of this year’s session is May 18. Supporters are, right now, working on putting segments of the Act into larger, omnibus bills before that date.

Cities all over the country will be watching what happens.