American Experiment testimony urges lawmakers to pass housing reform bills

Earlier today, the Senate Housing and Homeless Prevention Committee held a hearing on two important housing reform bills — SF 3980 and SF 3964.

SF 3964 is yet the most comprehensive bill proposed. It touches on many topics from density and lot sizes to parking requirements.

Specifically, the bill, among other things

  1. Requires that local governments allow the development of middle housing in all residential areas to improve density. Middle housing in this case includes townhouses, duplexes, and triplexes, among others.
  2. Authorizes local and city governments to approve multiple residential units per lot (with density bonuses granted for all-electric and affordable housing. The number of housing allowed per lot in this case is different depending on the city, and distance from major transit. Big cities can allow higher density than smaller cities. In each city, areas near transit and commercial districts can allow higher density than those further away.
  3. Eliminates minimum parking requirements for construction near transit, the bill The bill
  4. Eliminates aesthetic and architectural mandates. Instead, local government can only deny or accept development proposals based on a limited number of factors such as lot sizes.
  5. Scales down Minimum lot sizes required for housing development.
  6. Outlaw public hearings for housing development except for specific cases, such as historic districts or applications requesting variances from city zoning requirements.
  7. Requires cities and local governments to establish review processes for middle housing.
  8. Requires city and local governments to review housing development applications within 60 days.

SF 3980, on the other hand, only specifically touches multifamily housing. In addition to allowing multi-family housing in all residential zones, the bill limits minimum parking requirements to up to 1 per residential unit. The bill also eliminates public hearings for multi-family units.

In addition, it requires that “a city must not impose a height requirement on a multifamily residential development that is less than the tallest structure within a one-quarter-mile radius of the parcel on which the development will be built or the maximum height permitted under the city’s official controls, whichever is higher, so long as the maximum height of the development is no more than 150 feet.

American Experiment testimony

The lack of affordable housing is a big issue for Minnesota, especially those in the Twin Cities. As American Experiment research has shown, this is mainly due to one reason — stringent government regulations.

Both SF 3980 and SF 3964 can be improved in some ways, but currently, they are the best shot Minnesota has on housing reform. These bills have good proposals that address a lot of the factors that create a barrier to housing construction. For that reason, I went to the capitol to testify in support of housing reform.

For SF 3980, I provided written testimony. You can access it here. For SF 3964, I provided testimony in person. You can access it below.

Dear Madam Chair, Members of the Housing and Homeless Prevention Committee:

My name is Martha Njolomole, and I am an Economist at Center of the American Experiment. I am here to testify in support of bill SF 3964 because I believe that it would help address the housing affordability crisis in Minnesota.  

Minnesota needs more housing

As a public policy organization, Center of the American Experiment has one mission. That mission is to identify and advocate for policies that will make Minnesota a freer, more prosperous, and better-governed state. To that mission, my colleagues and I undertake research on several wide-ranging issues, all affecting the lives of every Minnesotan, including housing.

Overall, our research over the years has shown that Minnesotans, especially those living in the Twin Cities, are shortchanged when it comes to housing. In a report published in 2020, American Experiment found that, after removing coastal areas, the Twin Cities had the 6th highest housing costs among the 100 largest metro areas in the US, despite only being the 16th largest.

When looking only at the Midwest, the Twin Cities did not only just have the most expensive housing, but costs were also “37% higher than Chicago” — the next most expensive metro area, and more than double that of both Indianapolis and Cleveland. Overall, housing costs in the Twin Cities area were “56% higher than the other largest metro areas in the Midwest.”

There is only one factor mainly to blame for this: excessive regulations. Stringent building codes and regulations, such as minimum lot sizes, safety codes, energy-saving codes, and zoning rules, make it more costly and time-consuming to develop housing in Minnesota. This leads to high housing prices as supply fails to keep up with demand.

To keep costs under control, we need to build more housing in Minnesota. While I believe that some aspects of SF 3964 need to be improved, overall, the bill does a good in addressing a lot of the factors that make it nearly impossible to build housing, such as zoning restrictions on middle housing and Accessory Dwelling Units, density restrictions, minimum lot sizes, minimum parking requirements, aesthetic mandates, minimum square footage requirements, architectural design mandates, minimum garage requirements, among others. For that reason, I urge members of this committee to support the bill as well.

Thank you, Madam Chair, and Members of the Committee.