Have a nice Tuesday. Welcome to the next version. rent free. This week's stories include:
- Minnesota's zoning reform bill is pending in the Legislature.
- Housing transactions in New York are doing little for new supply and making everyone unhappy.
- Colorado prohibits laws regulating how many unrelated people can live together.
But first, here's this week's highlight: the U.S. Supreme Court's unanimous decision protecting property owners and builders from local government impact fees.
The Supreme Court ruled that impact fees can violate your property rights.
As of last Friday, Sheetz v. El Dorado CountyThe U.S. Supreme Court has ruled that impact fees levied on property owners can constitute unconstitutional property takings, regardless of whether they are levied by elected or unelected officials.
“The text of the Constitution does not limit the expropriation clause to any particular branch of government,” Justice Amy Coney Barret wrote in a unanimous decision. She said, “There is no basis for less protection of property rights in the hands of legislators than in the hands of executive officers. The takings clause applies equally to both.”
Want to learn more about city issues like regulation, development, and zoning? join rent free from reason Christian Britschgi.
that much Sheets The case began in 2016 when California retiree George Sheetz sued his local county government over $23,000 in traffic impact fees he had to pay to obtain a permit to build a single-family home on his property.
Impact fees can add tens of thousands of dollars to the cost of building a single home.
The county has explicitly stated that the fees it imposes on residential development are intended to pay for traffic impacts from the commercial development the county seeks to encourage.
Sheetz argued that taking his property was unconstitutional because the impact fee was unrelated to the individual impacts his new home would cause. His lawsuit argued that under the “unconstitutional terms” doctrine, he can only charge fees that have a “essential connection” to the impacts his individual projects create, and that those fees must be “roughly proportional” to those impacts.
The California Court of Appeals dismissed Sheetz's case on the grounds that the “unconstitutional conditions” doctrine applies only to local officials who impose temporary conditions on building permits. It was determined that “legislative mandates” adopted by local elected officials for broad property categories were exempt from these issues.
Brian Hodges, a Pacific Legal Foundation lawyer who handled the case, said the Supreme Court's ruling on Friday clearly shows that impact fees imposed by local councils can still violate the “unconstitutional conditions” doctrine. He said he gave it to me.
“This has been going on for over 20 years, and the courts have waived legislative requirements. [required] Hodges says: “These divisions have been exacerbated in state courts for too long.”
What the Supreme Court Did ~ no What will be decided Friday is whether Sheetz's $23,000 impact fee is actually unconstitutional, period. The narrow decision determined that simply because a fee is set by the legislature does not mean that the fee is not considered a collection.
The court also did not specify how much individualized local government impact fees should be.
All questions remain for state courts to resolve.
In a concurring opinion, Justice Neal Gorsuch argued that any impact fees adopted for specific developments or levied on entire categories of development must still be specifically tailored to the impacts of individual projects.
“Whether you owe fair compensation for the government taking your property cannot depend on whether the government also took your neighbor’s property,” Gorsuch wrote.
In contrast, in a concurring opinion, Justice Brett Kavanaugh wrote: Sheets These comments would prevent local governments from adopting fee schedules for a wide range of property types.
Minnesota zoning reform bill repealed and relaxed
Sweeping zoning reforms introduced in the Minnesota Legislature earlier this year have had a difficult time in the state legislature.
HF 4009, a “moderate housing” bill, would allow two units (four units in metropolitan areas) on every residential lot, legalize accessory dwelling units, relax minimum lot size regulations, and ban aesthetic design. no see. The requirement is officially gone.
The bill was filed in February but was not scheduled for the required hearing and vote in the House State and Local Government Committee. There is little optimism that progress will be made this year.
Another bill, HF 4010, which would allow multifamily development in commercial areas, is still in effect. However, it was significantly revised this week by the National Assembly's Local Autonomy Committee. The new version of the bill gives local governments more power to require parking spaces in new developments and allows them to require residential projects in commercial zones to maintain commercial space.
A separate bill that would have eliminated statewide minimum parking fees also appears to have been killed.
Opposition to these zoning bills came primarily from Minnesota local governments and city lobbying associations. Most states have city associations that lobby on behalf of local governments. There are four such leagues in Minnesota, all of which have staunchly opposed the state's preemption of local zoning laws.
“There’s been a lot of fear-mongering,” said Rep. Jim Nash (R-Waconia), a local zoning reform supporter who complained that local government officials and lobbyists were spreading misinformation about what the local bill would do. . “There have been a number of markets that have played a pretty aggressive role in creating more fear.”
Other local officials, including city planners and school superintendents, also opposed the zoning bill. Some school superintendents were particularly opposed to HF 4010 on the grounds that residential redevelopment of commercial properties would be a net financial drain on school districts.
“We argue that families seeking ‘high-density housing’ are unlikely to support a local school levy because of financial constraints on rent,” four school superintendents wrote in a letter urging lawmakers to oppose HF 4010. I wrote it.
Nick Erickson, senior director of housing policy at Housing First Minnesota, said there is hope that HF 4009 could be revived this year with a scaled-back bill that only covers accessory dwelling units.
Erickson said legislation that would exempt local governments from updating their comprehensive plans from the Minnesota Environmental Review Act, which has support from local governments, is likely to pass.
In Minneapolis, anti-density activists successfully filed a lawsuit to block the city from enacting zoning reforms based on claims that the city had not studied the environmental impacts of increased housing production.
New York's housing package has everyone upset and little new supply coming.
last week, rent free New York lawmakers have addressed the congealed form of a housing package they are pushing as part of a state budget agreement. Reports later Friday and early Monday will provide more details on what's included in this package.
city and state The package reportedly includes a “just cause eviction” (also known as rent control) policy that would limit annual rent increases to 10% or 5% plus inflation and require landlords to renew leases with current tenants. . This policy only applies to New York City, but other communities can “opt in” to these regulations.
Small multifamily buildings are exempt from this rule, as are buildings newer than 30 years old and apartments where rents are already high.
The annual rent cap is identical to statewide rent control laws in California and Oregon. The 30-year new construction exemption is more generous than the 15-year exemption for new construction in the state.
Overall, this version of “good cause” is less onerous than the policy pushed by left-wing activists last year, which presumed rent increases above 3% unreasonable and allowed tenants to challenge rent increases in court. Yes.
Left-wing activists and lawmakers are consequently up in arms against a more moderate version of these evictions, calling them “an unmitigated disaster.”
Also disappointed were building owners who, despite their reasons to the contrary, are subject to New York's long-standing rent stabilization law. They had hoped for a relaxation of regulations that limit rent increases for vacant apartments and the amount that can cover repair costs.
They argue that the limited additional flexibility they can get to raise rents is not enough to bring back online thousands of vacant rent-stabilized homes in desperate need of repairs and rehabilitation.
Jay Martin, executive director of the Community Housing Improvement Program (CHIP), which represents rent-stabilized owners, said: From the statement.
new york times Developers have reported that they will be hopeful that tax credits for building new affordable homes will be reinstated. The reported deal would also lift density restrictions on large apartment buildings in Manhattan.
In summary, it appears that this housing deal could have had a much worse impact on housing construction by including a stronger policy of “just cause” evictions. The supply-friendly aspects of the deals reported so far are likely to provide only marginal incentives for new home construction.
Colorado ends restrictions on cohabitation of unrelated people
On Monday, Colorado Gov. Jared Polis signed a bill banning local “occupancy limit” laws that limit the number of unrelated people who can live together.
“I’m excited to take this bold step today to cut through the red tape and get the government out of the business of telling us who we can live with,” Polis said in a statement.
To prevent single-family homes from being converted to shared rental housing, especially shared student housing, local governments often impose occupancy limits. Critics argue it limits supply, puts tenants in illegal share houses at risk of eviction and discriminates against non-traditional lifestyles.
Activists in places like Boulder, Colorado, have been campaigning for years to lift occupancy limits. The new law repeals it statewide.
quick link
- New York City Mayor Eric Adams' “City of Yes” housing reform package will begin the public review process.
- The tallest building in the United States may soon be built in Oklahoma City, Oklahoma.
- Boise, Idaho, is the city with the most recent increase in accessory home construction. city Recently repealed Rules that prohibit homeowners from renting out secondary units and require them to provide additional parking spaces.
- Rachel Cohen sound We have a new article about the promises and policy challenges of converting commercial real estate to residential development.
- California is considering legislation that would reduce both the risks and rewards of “builder bailout” projects. This would limit the size of these projects but clarify when and how local governments must approve them. read reason's past coverage of the legal uncertainty surrounding the builders' rescue project.
- Meanwhile, New Jersey's very strong builder relief laws are building more homes in the Garden State.