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September 26, 2019 Jamie Becker-Finn 559 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd Saint Paul, MN 55155 Alice Hausman 453 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd Saint Paul, MN 55155 RE: Housing Affordability Institute Report on City Building Permit Fees Dear Representatives Becker-Finn & Hausman: On behalf of the City of Roseville, we are writing to express our concerns regarding the report recently released by the Housing Affordability Institute titled “Building Permit Fees: Boosting the Bottom Line for Minnesota Cities”. This report lacks the complete picture and doesn’t reflect what is happening locally in Roseville. The purpose of our letter is to provide some general information that supports our belief the report lacks necessary context, but also to share information specific to Roseville. Our hope is you will consider these points as this conversation continues at the legislature and support future forums that offer a more balanced discussion. To our point, we offer the following information: The report only examined years 2014-2018, which were strong economic growth years. If the report examined the five years prior to 2014, the data will tell a very different story where building permit revenue was not sufficient to support City expenses related to development. We would advocate to examine ten years of data, which would include both an economic slump and surge and likely show cities are not profiting on the backs of development as this report suggests. The data collected for the report did not fairly account for all City costs related to development. This includes administrative, engineering, planning, and zoning expenses. To ensure fair and accurate data collection, we would advocate the reporting forms for the Department of Labor and Industry be revised to ensure cities are accurately reporting all costs they incur related to development. State laws provide that building permit fees are based on valuation, including labor and materials, and builders and developers are the ones setting those valuations during the permitting process. Although this report focuses on City fees, a complete picture should include the fact that the largest variable for building a home is labor and materials at 48-55% of the total cost, followed second by land costs (noted in the report). Further, the value of a home varies greatly from community to community. This report is suggesting City fees are contributing to an inability to create enough affordable housing. However, the report uses examples of homes with an average price of nearly $400,000, includes fees for improvements that are elected by the builder (such as a pool), and excludes 2660 Civic Center Drive • Roseville, MN 55113 www.cityofroseville.com