By Bill McAuliffe • bill.mcauliffe@startribune.com

Matt Zarracina would never have bought a house in Minneapolis' Linden Hills neighborhood last fall if he knew the city was going to impose a moratorium on teardowns.

"I can't afford to wait a year while the city changes how it regulates residential governance," said Zarracina, whose plans to tear down the house and build a new one are now in limbo.

Spurred by complaints about construction noise and disruption, the moratorium has riled some architects, builders, real estate agents and others, who said they were blindsided by it. They called it an overreaction that will cost hundreds of jobs and bring dozens of projects to a halt. They banded together Tuesday, setting up an opposition website, starting a petition drive and encouraging opponents to attend next week's public hearing. "This was a great shock to everyone," Chad Hanson, owner of Sustainable 9 Design + Build, said of Friday's surprise decision. "I think things could have been done in a much more collaborative fashion."

Seven years after Minneapolis thought it had resolved the conflict over teardown-and-rebuilds, the issue has roared back to life as their numbers have soared, with permits jumping fivefold in southwest Minneapolis since 2009.

Driven by buyers who want to live close to the city but have the amenities of new suburban homes, the practice clogs streets with construction equipment, crews and new homes that critics contend are too large.

Sharon Potter cleared her sidewalk on Tuesday as construction crews worked on a teardown next door in the 5100 block of York Avenue S. The higher taxes that follow the new homes into the neighborhood penalize longtime residents, she said.

Responding to those complaints in her ward, new City Council Member Linea Palmisano imposed the moratorium on teardowns and rebuilds, and major remodels, in Linden Hills and four other southwest Minneapolis neighborhoods: Fulton, Armatage, Kenny and Lynnhurst.

"It's a big step and not something I come to lightly," she said. "Sure, I'm new around here, but this is something I've been having personal conversations about with thousands of people throughout the campaign. For many, it's the biggest constituent matter to be addressed."

Palmisano said the moratorium could last for a year and will allow city officials and some University of Minnesota graduate students to study the economic and environmental effects of teardowns and rebuilds, as well as to examine city regulations on basic construction issues, including hours and debris. The moratorium took effect immediately and still needs approval by the full council.

Flashback to 2007

Now mayor, Betsy Hodges was facing similar complaints from neighbors near teardowns when she represented the 13th Ward in 2007 and succeeded in regulating the height and volume of new homes, which in Minneapolis nearly always means houses that are replacing older ones. But since then, Palmisano and other critics say architects and builders have in many cases dodged the height limits by measuring from raised or concealed foundations. That has enabled them to avoid seeking time-consuming zoning variances, and to remove requirements to notify neighborhood organizations — and most neighbors.

Palmisano, who succeeded Hodges on the council, said that if architects and builders are going by the book, "We have real problems with the book."

Fulton Neighborhood Association President Jim Tincher said the builders can put up a house "that's twice as big and not particularly nice to look at, and not tell anyone. But if you want a chicken, you have to tell your neighbors."

Hanson bristled at the criticism, saying: "The last thing any builder wants to do is build something that is too tall. I can't speak for all builders, but I can say from my company that we're trying to fit our homes into the existing neighborhoods."

He's one of many organizers of the online petition, at www.nomoratorium.com, aimed at stopping the moratorium. The site argues it's bad for the southwest Minneapolis economy and a job-killer.

Gabriel Keller, principal at the architectural firm Peterssen/Keller, said the moratorium could leave some would-be homeowners facing a one-year wait to build the home they're already paying for.

"It dumps one set of problems on a whole other set of people," he said, saying homeowners are stuck sorting out loans and places to live. "Homeowners will get caught in the middle."

'We were ambushed'

Hanson said he and 10 builders were invited to talk to Palmisano on Friday afternoon, responding to an invitation from her that said: "I'd like to discuss and understand your perspective on current City processes and policies around residential infill housing (commonly known as "teardowns"). I seek your input on improvement potential to existing regulations."

He and the other builders went, not realizing that the moratorium had been approved that morning.

"When we got to the meeting we felt like we were ambushed," he said, adding that he and the other builders estimated that the moratorium could cost hundreds of jobs and $50 million to $100 million in projects.

Sharon Potter noted that the teardown issues are vivid in her Fulton neighborhood. In fact, work was beginning on a new foundation next door to her as she was scraping the ice off her steps on Tuesday. She fears the new house will block the sun from the windows above her living room fireplace.

"This neighborhood wasn't made for those giant houses," said Potter, who has lived in the same home for 28 years. "There's no place for kids to play in the yards. There are no yards."

Potter said the higher taxes that follow the more valuable new homes penalize longtime residents, particularly retirees such as herself.

Palmisano said that runs counter to the strategy, which she promotes, of providing housing that helps residents age in the neighborhoods where they've long lived.

In Edina

Other communities are dealing with tensions over teardowns. In Edina, the number of housing teardown permits set another record in 2013, but the addition of a redevelopment point person and some new policies seem to have blunted anger over noise and construction mess. Last year, Edina tightened requirements for height and setbacks for new homes depending on lot size.

Riding out the controversy, for now, are the residents who live in the homes that replaced the smaller, older ones across many neighborhoods in the city.

Emily Roy, who with her husband, Jarred, bought a 2,200-square-foot home in the Armatage neighborhood that replaced an older home on the same foundation, said they like having a new home in the city.

While their home has some green space, it doesn't come with the time-consuming big yard that a suburban home might.

"We think it helps continue to bring the neighborhood up-to-date," Roy said of the piece-by-piece overhaul of housing. "It helps all our homes. But it's important that it fits the style of the neighborhood."

Staff writer Mary Jane Smetanka contributed to this report.

Bill McAuliffe • 612-673-7646