Builders group sues Edina over costly tree-replacement fees

A statewide builders’ trade group has sued the city of Edina, saying its rules around tree removal go beyond what Minnesota law allows and add unnecessary costs to housing.

The city approved the rules two years ago in an effort to preserve the tree canopy and the character of its neighborhoods. But the measure has drawn the ire of builders and residents whose development plans require tens of thousands of dollars set aside for tree replacement — driving costs higher in a city where housing is already relatively expensive.

Housing First Minnesota, a group that represents nearly 1,000 builders, remodelers and industry suppliers across the state, filed the lawsuit Friday in Hennepin County District Court. The lawsuit says the city’s requirements are illegal because state law doesn’t authorize cities to impose the fees.

“The law is clear: Cities can only charge fees that the Legislature has authorized, and no such authorization has been given,” Housing First CEO James Vagle said in a statement. “It’s a base expectation for homeowners across Minnesota that city policies follow state law.”

The spokesperson for the city declined to comment, citing the pending litigation.

The city had been working with Housing First in late 2024 to try to address the group’s problems with the ordinance. At the time, City Manager Scott Neal said the city enacted the ordinance after hearing from residents concerned about too many mature trees being removed during redevelopment.

“The goal is to reduce the amount of old-growth trees that are removed for development projects,” Neal said in a December 2024 interview. “That’s the goal. If we can do that by cooperating and helping people site their building and their construction in a way that reduces tree damage, that’s great. That’s one way to do it. But another way to do it is to build in some financial incentives and disincentives that encourage people to preserve trees rather than remove.”

If new trees aren’t replanted and surviving for a year after construction, the city keeps the money.

In a separate ordinance, Edina also requires property owners to pay a permit fee to remove trees from undeveloped lots.

Housing First points to Minnesota Supreme Court cases that struck down similar development-related fees as beyond city authority.

According to the lawsuit, Edina has collected more than $1 million through its tree escrow program in the past three years, including nearly $500,000 in 2023 alone. Housing First members have paid about $165,000 in that period.

Nick Erickson, Housing First’s senior director of housing policy, called Edina’s ordinances “probably the most exclusionary local policy” he has seen in nearly a decade of housing work.

Erickson said those fees “needlessly add to the cost of housing” at a time when Minnesota is short housing units, including in the Twin Cities.

“We can’t address our housing deficit when we have policies that are exclusionary and not authorized under state law,” he said.

Housing First is asking the court to declare the ordinances invalid and block the city from enforcing them.