Housing shortage starts at city halls

Opinion editor’s note: Star Tribune Opinion publishes a mix of national and local commentaries online and in print each day. To contribute, click here.

•••

President Biden, Donald Trump, Bernie Sanders and Nikki Haley all agree that America has a housing shortage. City halls across Minnesota offer clues as to why.

In 2023, my hometown of Eagan required any gardener planting flowers at a new apartment complex to be accredited by a specific school (the University of Minnesota), mandated the specific color of fencing a residential construction site must use to protect nearby trees (orange) and held multiple public meetings to decide whether a single homeowner should be allowed to build a backyard patio.

As a commissioner on Eagan’s Advisory Planning Commission — one of several regulatory bodies responsible for evaluating proposed developments in Eagan — it’s my job to advise on enforcement of these requirements. I often can’t help but feel embarrassed that they exist.

Like many communities in Minnesota, Eagan uses substantive and procedural zoning rules to sharply limit new residential development. The city prohibits the construction of multifamily housing in most areas, and even when new construction is allowed, developers must navigate a complex set of regulations through which administrators can delay, derail and micromanage projects.

As a result, viable proposals take years to approve, while others become more expensive or never get built. And because the supply of housing isn’t allowed to keep up with demand, prices for everyone go up.

Housing in Minnesota is chronically undersupplied — not for lack of developer interest, but because of local practices that prohibit new projects and subject even noncontroversial proposals to a Byzantine approval process. In a “healthy” housing market, the rental vacancy rate is roughly 6%. But in Eagan, this rate is approximately 1% to 2% because demand dramatically outpaces supply.

None of this is unique to Eagan.

Local zoning was originally created to prevent racial minorities from moving into upper-class neighborhoods. After explicit racial discrimination was outlawed, many communities in the U.S. designed complex “race-neutral” rules to maintain the status quo. Racial covenants were out, but in their place came single-family zoning, minimum lot sizes, aesthetic rules, parking mandates and endless meetings with unelected administrators who can, in practice, perpetuate a similar system of exclusion.

Today, most defenders of this exclusionary approach argue that local restrictions on development are necessary to protect property values. But they’re wrong. While it’s true that some property values can be negatively affected by some types of nearby development, as a whole, restrictions on housing do more to stymie property values than they do to maintain them. Land subject to regulatory restrictions is inherently less valuable than land that can be freely redeveloped.

Economists estimate that local restrictions on housing lowered the growth of U.S. gross domestic product by more than 50% between 1964 and 2009 — a staggering price for society to pay.

State legislatures have the power to override local laws to allow more homes to be built. Ours might say, for example, that Minnesotans have the right to add accessory dwelling units on their property — like an in-law suite or a garage apartment. Legislators could require fast-tracking of building permits for proposals that meet a set of universal rules. And they could legalize fourplexes or sixplexes statewide.

Legislatures across the country are already taking such actions. Broad bipartisan coalitions in Washington, Montana and Vermont passed legislation last year to allow for more construction by overriding local restrictions.

Minnesota should follow their lead.

Rep. Steve Elkins, DFL-Bloomington, has introduced legislation to allow duplexes in neighborhoods currently zoned exclusively for single-family homes. Rep. Jim Nash, R-Waconia, has offered his support and introduced his own bill to roll back aesthetic restrictions. Just last week, Sen. Omar Fateh, DFL-Minneapolis, proposed getting rid of parking mandates. These are all good ideas.

Housing is the largest expense for the average Minnesotan — and local rules that stifle development increase that cost. In the upcoming session, legislators have an opportunity to curb those rules and deliver a win for the state’s residents and economy. I hope they take it.