Impact of Building Permit Fees on New Housing Costs Debated

Representatives from the housing industry and cities appeared before the Senate Select Committee on Home Ownership Affordability and Availability Tuesday, September 10, to comment on a report citing building permit fees as one factor driving the high cost of new home construction.

According to David Siegel of Housing First Minnesota, some cities are going beyond statutory requirements by directing revenue from building permit fees to general fund collections. "So what does that mean for homeowners? It means that homes are more expensive, sometimes $3,000 dollars more than they need to be," he said.

"It's not as simple as it has been presented," Irene Kao of the League of Minnesota Cities told legislators. She explained that cities have administrative, engineering and zoning expenses resulting from the new housing development that the building permit fees help cover.