Government​ Regulations​ And Fees​ Drive Up Minnesota Home Prices

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The Twin Cities ranked first in housing costs among the 20 largest metro areas

April 19, 2017

Photo: Tony Webster/Wikimedia Commons

A quarter of Minnesota households pay too much for housing, according to a state finance agency. There are a bunch of reasons for that.

The Brainerd Dispatch reports that safety and energy codes, city fees, and land prices have pumped up housing costs. Recent U.S. Census data says that the Minneapolis and St. Paul metro area was No. 1 in housing costs among the nation's 20 largest metros.

A few builders in Minnesota estimated that strict building codes, ones that require higher snow loads or thicker insulation, can increase costs by between $15,000 and $29,000. In 2012, energy revisions in the state cost homebuyers an extra $1 per square foot, which was a big jump.

A new policy requires townhomes and twin homes to have a certain number of fire sprinklers, and costs for those could add up to $10,000. The town of Moorhead has seen twin home construction permits plummet since the change was enacted.

Minnesota cities can charge several thousand dollars in one-time fees on the sales of new homes to fund public entities such as parks, streetlights, and the police force. And, zoning rules in the suburbs of the Twin Cities set large minimum lot sizes, which can increase land costs to $100,000 per plot.

Remi Stone, vice president of the Builders Association of Minnesota Stone, is matter of fact about how things currently stand in Minnesota. "We are a high-regulation, high-housing-cost state. That is our preference, and if you don't like it you can move to Canada or Texas."

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