HF 4009

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/07/2024 04:34pm

A bill for an act
relating to local government; establishing minimum allowable densities on
residential lots in cities; requiring the authorization of middle housing types to be
built on residential lots; authorizing subdivision of residential lots; limiting parking
requirements established by cities; requiring the Minnesota Housing Finance
Agency to create a model ordinance for cities; limiting city aesthetic mandates on
residential building permits; establishing requirements for multifamily residential
developments in cities; proposing coding for new law in Minnesota Statutes,
chapter 462.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [462.3571] MULTIFAMILY RESIDENTIAL DEVELOPMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Affordable housing development" means a multifamily residential development in
which:
new text end

new text begin (1) at least 20 percent of the residential units are for households whose incomes do not
exceed 50 percent of the area median income; or
new text end

new text begin (2) at least 40 percent of the residential units are for households whose incomes do not
exceed 60 percent of the area median income.
new text end

new text begin The deed or declaration for an affordable residential unit must also contain a restrictive
covenant requiring the property to remain affordable housing for at least 30 years.
new text end

new text begin (c) "City" means a home rule charter or statutory city.
new text end

new text begin (d) "Residential unit" means a residential dwelling for the use of a single owner or tenant.
new text end

new text begin (e) "Structure" means anything constructed or installed for residential or commercial
use which requires a location on a parcel of land.
new text end

new text begin Subd. 2. new text end

new text begin Multifamily residential developments. new text end

new text begin (a) Subject to compliance with all
municipal standards, multifamily residential developments are a permitted use in any
commercial zoning district. A multifamily residential development may not be constructed
on a lot zoned for a single-family home unless otherwise authorized by law, rule, or
ordinance.
new text end

new text begin (b) A multifamily residential development may be mixed use so long as at least 50
percent of the square footage of the development is dedicated to residential use.
new text end

new text begin Subd. 3. new text end

new text begin Compliance with comprehensive plan; zoning. new text end

new text begin A multifamily residential
development must be approved by a city if it is consistent with the comprehensive plan on
the date of submission and complies with the requirements of this section and all state and
municipal standards.
new text end

new text begin Subd. 4. new text end

new text begin Applicable zoning standards. new text end

new text begin (a) A city may not impose more restrictive
standards on a multifamily residential development than those that apply to property zoned
for the current use of the parcel.
new text end

new text begin (b) A city must not impose a height requirement on a multifamily residential development
that is less than the tallest structure within a one-quarter mile radius of the parcel on which
the development will be built, or the maximum height permitted under the city's official
controls, whichever is higher, so long as the maximum height of the development is no
more than 150 feet.
new text end

new text begin (c) A city must not impose a setback requirement on a multifamily residential
development that is less than the smallest minimum setback distance required of a structure
within a one-quarter mile radius of the parcel on which the development will be built.
new text end

new text begin Subd. 5. new text end

new text begin Parking requirements limited. new text end

new text begin A city may not require more than one off-street
parking space per residential unit.
new text end

new text begin Subd. 6. new text end

new text begin Affordable housing development; height requirements. new text end

new text begin (a) An affordable
housing development must be permitted to exceed both a maximum height requirement and
a maximum floor area ratio limitation imposed by city official controls as provided in
paragraphs (b) and (c). The authority in paragraphs (b) and (c) that will produce the tallest
development with the most number of affordable housing units on the parcel shall be applied
to the affordable housing development.
new text end

new text begin (b) An affordable housing development may either:
new text end

new text begin (1) exceed the height requirement for the zoning district where the affordable housing
development will be located by 35 feet in height; or
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new text begin (2) match the maximum allowed height in any zoning district within one mile of the
affordable housing development, so long as the maximum height is no more than 150 feet.
new text end

new text begin (c) An affordable housing development must be permitted to do one of the following,
whichever results in the largest development:
new text end

new text begin (1) exceed the maximum density as permitted by city standards or the city's
comprehensive plan by 30 percent;
new text end

new text begin (2) exceed the lot coverage ratio by 30 percent;
new text end

new text begin (3) exceed the floor area ratio by 30 percent; or
new text end

new text begin (4) exceed the maximum impervious lot coverage area by 30 percent.
new text end

new text begin Subd. 7. new text end

new text begin Administrative review process. new text end

new text begin (a) Notwithstanding any law, rule, or ordinance
to the contrary, a city must establish an administrative review process for building permit
applications for multifamily housing development projects. The administrative review
process must review and approve or deny such building permit applications based on the
application's conformity with the city's comprehensive plan, other applicable zoning
requirements, and state law. An application may not be approved contingent on the
development being a part of planned unit development, the approval of a conditional use
permit, the completion of a study, or other condition that is not related to conformity with
the city's comprehensive plan, zoning requirements, and state law.
new text end

new text begin (b) An application denial must be in writing and must describe the reasons for denial
and the ways the application or development design can be amended to receive approval at
a future date. Nothing in this subdivision prevents an applicant who received a denial from
submitting a new application for the same multifamily housing development, which shall
be treated as a new submission by the city.
new text end

new text begin (c) The administrative review process shall not involve a public hearing unless one is
required by state or federal law. Approval or denial of an application does not require
approval by the city council or a subcommittee of the council.
new text end

new text begin (d) An application subject to the administrative review process under this subdivision
must be approved or disapproved within 60 days following the receipt by the city of a
completed application by the applicant. If the city fails to approve or disapprove an
application within 60 days, the application shall be deemed approved. The city may not
request an extension for review of the application from the applicant.
new text end

new text begin (e) A city may request that an applicant incorporate certain design elements into the
development that go beyond the criteria in state law and city official controls. The applicant
may incorporate those elements in the design of the development but is not required to do
so.
new text end

new text begin Subd. 8. new text end

new text begin Local funds. new text end

new text begin Notwithstanding any law, rule, or ordinance to the contrary, a
city may not impose requirements on a multifamily housing development that are more
restrictive than the requirements in this section if a multifamily housing development is
funded in whole, or in part, with local funds or is located in a tax increment financing district
or other special district created by the city.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025.
new text end

Sec. 2.

new text begin [462.3575] CITY MINIMUM RESIDENTIAL DENSITIES AND
ASSOCIATED REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Accessory dwelling unit" means any building that contains one dwelling unit used,
intended, or designed to be built, used, rented, leased, let, or hired out to be occupied, or
occupied for living purposes and is located on the same property as an existing dwelling.
An accessory dwelling unit may be attached or detached from the existing dwelling.
new text end

new text begin (c) "Affordable housing" means a residential dwelling unit affordable to households at
or below 115 percent of the area median household income, for an owner-occupied unit, or
at or below 60 percent of the area median household income, for a unit that is leased. The
deed or declaration for the unit must also contain a restrictive covenant requiring the property
to remain affordable housing for at least ten years, if the unit is owner-occupied, or at least
30 years if the unit is leased.
new text end

new text begin (d) "All-electric and efficient home" means a residential dwelling unit that utilizes
electricity as its sole source of energy for heating, hot water heating, cooling, and appliances,
and meets the most current minimum efficiency standards of a zero energy ready home
under the Zero Energy Ready Home program administered by United States Department
of Energy.
new text end

new text begin (e) "City" means a home rule charter or statutory city.
new text end

new text begin (f) "Cottage housing" means residential dwelling units on a lot with a common open
space that either:
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new text begin (1) is owned in common; or
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new text begin (2) has units owned as condominium units with property owned in common and a
minimum of 20 percent of the lot size as open space.
new text end

new text begin (g) "Courtyard apartment" means a building with up to four attached residential dwelling
units arranged on two or three sides of a yard or garden.
new text end

new text begin (h) "Duplex" means a two family home, classified as an IRC-2 in the State Building
Code and not meeting the definition of townhouse.
new text end

new text begin (i) "Fiveplex" means a building containing five residential dwelling units intended for
nontransient occupancy and not meeting the definition of townhouse.
new text end

new text begin (j) "Fourplex" means a building containing four residential dwelling units intended for
nontransient occupancy and not meeting the definition of townhouse.
new text end

new text begin (k) "Lot" means any contiguous parcel of land in the possession of, owned by, or recorded
as the property of the same claimant or person.
new text end

new text begin (l) "Major transit stop" means a stop or station for a guideway or for a busway, as the
terms are defined in section 473.4485, subdivision 1.
new text end

new text begin (m) "Metropolitan area" has the meaning under section 473.121, subdivision 2.
new text end

new text begin (n) "Middle housing" means buildings that are single-family detached homes and
residential properties that are compatible in scale, form, and character with single-family
detached homes. Middle housing includes all of the following housing types:
new text end

new text begin (1) duplexes;
new text end

new text begin (2) triplexes;
new text end

new text begin (3) fourplexes;
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new text begin (4) fiveplexes;
new text end

new text begin (5) sixplexes;
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new text begin (6) townhouses;
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new text begin (7) stacked flats;
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new text begin (8) courtyard apartments;
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new text begin (9) cottage housing; and
new text end

new text begin (10) single-family detached homes.
new text end

new text begin (o) "Residential dwelling unit" or "unit" means a residential dwelling unit for the use of
a single owner or tenant, and applies to any type of residential structure unless otherwise
specified.
new text end

new text begin (p) "Single-family detached home" means any building that contains one residential
dwelling unit used, intended, or designed to be built, used, rented, leased, let, or hired out
to be occupied, or occupied for living purposes that is not attached to another structure.
new text end

new text begin (q) "Sixplex" means a building containing six residential dwelling units intended for
nontransient occupancy and not meeting the definition of townhouse.
new text end

new text begin (r) "Stacked flat" means a nontransient residential building of no more than three stories
on a lot zoned for residential development in which each floor is a residential dwelling unit.
new text end

new text begin (s) "Townhouse" means a single-family residential dwelling unit constructed in a group
of three or more attached units in which each unit extends from the foundation to the roof
and with open space on at least two sides. Each single-family residential dwelling unit shall
be considered to be a separate building. Separate building service utilities shall be provided
to each single-family residential dwelling unit when required by the Minnesota State Building
Code.
new text end

new text begin (t) "Triplex" means a building containing three residential dwelling units intended for
nontransient occupancy and not meeting the definition of townhouse.
new text end

new text begin Subd. 2. new text end

new text begin Middle housing types permitted. new text end

new text begin Any city in the metropolitan area and any
city outside of the metropolitan area with a population of 10,000 or more must authorize at
least six types of middle housing other than single-family detached homes to be built on
residential lots in the city to achieve the density requirements in this section.
new text end

new text begin Subd. 3. new text end

new text begin Cities of the first class; required residential densities. new text end

new text begin (a) A city of the first
class must permit the development of at least four residential dwelling units on any residential
lot that is more than one-half mile from a major transit stop, unless one of the following
criteria are met:
new text end

new text begin (1) if all of the units are all-electric and efficient homes, the city must permit the
development of at least six residential dwelling units on the lot;
new text end

new text begin (2) if at least two of the units are affordable housing, the city must permit the development
of at least six residential dwelling units on the lot; or
new text end

new text begin (3) if all of the units are all-electric and efficient homes and at least two of the units are
also affordable housing, the city must permit the development of at least eight residential
dwelling units on the lot.
new text end

new text begin (b) A city of the first class must permit the development of at least six residential dwelling
units on any residential lot that is one-half mile or less from a major transit stop, unless one
of the following criteria are met:
new text end

new text begin (1) if all of the units are all-electric and efficient homes, the city must permit the
development of at least eight residential dwelling units on the lot;
new text end

new text begin (2) if at least two of the units are affordable housing, the city must permit the development
of at least eight residential dwelling units on the lot; or
new text end

new text begin (3) if all of the units are all-electric and efficient homes and at least two of the units are
also affordable housing, the city must permit the development of at least ten residential
dwelling units on the lot.
new text end

new text begin (c) The requirements of this subdivision apply regardless of the types of middle housing
authorized by the city under subdivision 2.
new text end

new text begin Subd. 4. new text end

new text begin Greater Minnesota small cities; required residential densities. new text end

new text begin A city with
a population of less than 10,000 that is located outside of the metropolitan area must permit
the development of at least two residential dwelling units on any residential lot.
new text end

new text begin Subd. 5. new text end

new text begin Other cities; required residential densities. new text end

new text begin (a) A city to which the
requirements of subdivisions 3 and 4 do not apply must permit the development of at least
two residential dwelling units on any residential lot that is more than one-half mile from a
major transit stop, unless one of the following criteria are met:
new text end

new text begin (1) if all of the units are all-electric and efficient homes the city must permit the
development of at least three residential dwelling units on the lot;
new text end

new text begin (2) if at least one of the units is affordable housing, the city must permit the development
of at least three residential dwelling units on the lot; or
new text end

new text begin (3) if all of the units are all-electric and efficient homes and at least one of the units is
also affordable housing, the city must permit the development of at least four residential
dwelling units on the lot.
new text end

new text begin (b) A city subject to this subdivision must permit the development of at least four
residential dwelling units on any residential lot that is one-half mile or less from a major
transit stop, unless one of the following criteria are met:
new text end

new text begin (1) if all of the units are all-electric and efficient homes, the city must permit the
development of at least six residential dwelling units on the lot;
new text end

new text begin (2) if at least two of the units are affordable housing, the city must permit the development
of at least six residential dwelling units on the lot; or
new text end

new text begin (3) if all of the units are all-electric and efficient homes and at least two of the units are
also affordable housing, the city must permit the development of at least eight residential
dwelling units on the lot.
new text end

new text begin (c) The requirements of this subdivision apply regardless of the types of middle housing
authorized by the city under subdivision 2.
new text end

new text begin Subd. 6. new text end

new text begin Municipal standards. new text end

new text begin (a) Any standards, performance conditions, or
requirements imposed by a city for residential dwelling units permitted under subdivisions
3, 4, and 5 must directly relate to protecting public health, safety, and general welfare.
new text end

new text begin (b) A city may not use official controls to prohibit the application of this section, including
imposing performance conditions, standards, requirements, ordinances, fees, exactions, and
dedications on any residential dwelling unit or development that are more restrictive than
those in this section or other law or rule.
new text end

new text begin Subd. 7. new text end

new text begin Commercial district designation. new text end

new text begin A city with a population of 10,000 or more
that does not have a major transit stop within the boundaries of the city must designate the
boundaries of at least one commercial district in the city. The commercial district must be
adjacent to residential property. The boundaries of the commercial district must be treated
as a major transit stop for the purposes of determining properties to which the densities in
subdivisions 3 and 5 apply.
new text end

new text begin Subd. 8. new text end

new text begin Accessory dwelling units authorized. new text end

new text begin (a) An accessory dwelling unit may be
built on any residential lot in a city, regardless of total lot size, street frontage, connectivity
between the accessory dwelling unit and the primary dwelling on the lot, and whether the
lot is occupied by the property owner, so long as the accessory dwelling unit is built in
conformance with the Minnesota State Building Code.
new text end

new text begin (b) A city may permit more than one accessory dwelling unit to be built on a residential
lot.
new text end

new text begin (c) An accessory dwelling unit qualifies as a residential dwelling unit for the purposes
of subdivisions 3, 4, and 5.
new text end

new text begin Subd. 9. new text end

new text begin Minimum lot size permitted. new text end

new text begin (a) A city may, by ordinance, require a minimum
lot size in accordance with this subdivision to which the density requirements of subdivisions
3 and 5 apply.
new text end

new text begin (b) A minimum lot size for a city of the first class must not be greater than:
new text end

new text begin (1) 2,500 square feet for a single-family detached home, duplex, triplex, fourplex,
fiveplex, sixplex, stacked flat, and courtyard apartment; or
new text end

new text begin (2) 1,200 square feet for a townhome and cottage housing.
new text end

new text begin (c) A minimum lot size for a city subject to subdivision 5 must not be greater than:
new text end

new text begin (1) 4,000 square feet for a single-family detached home, duplex, triplex, fourplex,
fiveplex, sixplex, stacked flat, and courtyard apartment; or
new text end

new text begin (2) 1,200 square feet for a townhome and cottage housing.
new text end

new text begin (d) This subdivision does not apply to a city located outside of the metropolitan area
with a population of less than 10,000.
new text end

new text begin Subd. 10. new text end

new text begin City official controls; limitations. new text end

new text begin (a) City official controls establishing,
directly or indirectly, the permitted size, scale, or form of a building may only impose the
following limitations:
new text end

new text begin (1) building height maximums;
new text end

new text begin (2) yard or setback requirements;
new text end

new text begin (3) maximum lot coverage;
new text end

new text begin (4) impervious surface maximums;
new text end

new text begin (5) lot width minimums;
new text end

new text begin (6) lot area minimums; and
new text end

new text begin (7) a maximum number of residential units per lot.
new text end

new text begin (b) City official controls must not impose architectural features, minimum square footage,
garage square footage, or floor area ratios, and must not create practical difficulties in the
placement of residential units on any lot.
new text end

new text begin (c) City official controls establishing, directly or indirectly, the maximum square footage,
gross floor area, or other size standard for residential dwelling units must be increased by
at least ten percent per single-family unit built on a lot where multiple single-family units
will be developed. A city may opt not to adjust a height standard for single-family units
entitled to other standard adjustments under this paragraph.
new text end

new text begin (d) A city must reduce a setback standard by at least one foot for an all-electric and
efficient home.
new text end

new text begin Subd. 11. new text end

new text begin Parking requirements limited. new text end

new text begin (a) A city may not require off-street parking
space for a residential dwelling unit that is one-half mile or less from a major transit stop.
new text end

new text begin (b) A city may not require more than one off-street parking space per residential dwelling
unit that is over one-half mile from a major transit stop.
new text end

new text begin Subd. 12. new text end

new text begin Affordable housing; replacement required. new text end

new text begin Affordable housing on a
residential lot may only be demolished, in whole or in part, for the construction of middle
housing if the middle housing development will create at least as many affordable housing
units as exist in the structure to be demolished.
new text end

new text begin Subd. 13. new text end

new text begin Subdivision of lots permitted; administrative review process established. new text end

new text begin (a)
Notwithstanding any law, rule, or ordinance to the contrary, a city must permit a residential
lot to which the density requirements of subdivisions 3, 4, and 5 apply to be subdivided in
a manner that allows all units to be built on the property to be single-family detached homes.
new text end

new text begin (b) A residential lot created from the subdivision of property under paragraph (a) that
is smaller than a minimum lot size required pursuant to subdivision 9 is not subject to the
density requirements under subdivisions 3, 4, and 5.
new text end

new text begin (c) A city shall process an application to subdivide a residential lot in accordance with
the procedures under subdivision 14.
new text end

new text begin Subd. 14. new text end

new text begin Administrative design review process established. new text end

new text begin (a) Notwithstanding
section 462.358, subdivision 3b, or any other law, rule, or ordinance to the contrary, a city
must establish an administrative design review process for building permits for middle
housing development projects and subdivision applications under subdivision 13. The
administrative review process must review and approve or deny such building permit and
subdivision applications based on the application's alignment with the city's comprehensive
plan and other applicable zoning requirements. The administrative review process shall not
involve a public hearing unless one is required by state or federal law or the project involves
or affects a lot located in a historic district under section 138.73. The city may hold a public
hearing on a building permit or subdivision application under this section for requests for
variances from city zoning requirements. Except as provided in paragraph (b), an application
subject to the administrative design review process under this paragraph must be approved
or disapproved within 60 days following the receipt by the city of a completed application
by the applicant. If the city fails to approve or disapprove an application within 60 days,
the application shall be deemed approved.
new text end

new text begin (b) A city must specify in writing all requirements for an application for a building
permit for middle housing or for a subdivision to be considered complete. The written
completion requirements must accompany each application.
new text end

new text begin (c) An applicant may direct the city to toll the 60-day review period for an application
for a building permit for middle housing or for a subdivision application under subdivision
13. The applicant may also direct the city to begin to run the 60-day time period for an
application that was previously tolled upon request by the applicant. A request under this
paragraph must be in writing. A city may not charge a fee to the applicant for a request
under this paragraph.
new text end

new text begin Subd. 15. new text end

new text begin Model ordinance. new text end

new text begin (a) On or before December 31, 2024, the commissioner of
the Minnesota Housing Finance Agency must develop and publish a model ordinance for
adoption by cities that addresses the requirements of this section. On or before July 1, 2025,
a city must adopt the model ordinance under this subdivision or amend its official controls
to be consistent with the requirements of this section as part of an alternative density plan
under subdivision 16.
new text end

new text begin (b) The Minnesota Housing Finance Agency must convene an advisory group of
stakeholders to provide information during the development of the model ordinance. The
advisory group must represent expertise in city administration, housing affordability, housing
construction, municipal land use planning and zoning, and any other topics that the agency
determines are necessary.
new text end

new text begin Subd. 16. new text end

new text begin Alternative density plans. new text end

new text begin A city may develop an alternative density plan
and submit the plan to the commissioner of the Minnesota Housing Finance Agency for
approval. The commissioner may approve an alternative density plan under this subdivision
only if the city demonstrates that the plan will result in an equal or greater amount of middle
housing production that would occur with the adoption of the model ordinance under
subdivision 15. The commissioner must approve or disapprove an alternative density plan
within 120 days of the day of receipt of the plan by the commissioner.
new text end

new text begin Subd. 17. new text end

new text begin Exception. new text end

new text begin Nothing in this section authorizes a residential dwelling unit that
is prohibited by state or federal law, or an ordinance adopted pursuant to such a state or
federal law, that protects floodplains, areas of critical concern, wild and scenic rivers, or
that otherwise restrict residential dwelling units to protect the environment or scenic areas.
new text end

new text begin Subd. 18. new text end

new text begin State Building Code; State Fire Code. new text end

new text begin This section does not modify any
requirement of the State Building Code or State Fire Code.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025, except that subdivisions
1, 15, and 16 are effective July 1, 2024, and that subdivisions 4 and 5 are effective July 1,
2026.
new text end

Sec. 3.

new text begin [462.3576] LIMITATION ON AESTHETIC MANDATES FOR CITIES.
new text end

new text begin A home rule charter or statutory city must not condition approval of a residential building
permit, subdivision development, or planned unit development on the use of one or more
of the following:
new text end

new text begin (1) specific materials for aesthetic reasons for property used for a residential purpose as
defined by the State Building Code;
new text end

new text begin (2) minimum square footage or floor area ratios;
new text end

new text begin (3) architectural design elements including, but not limited to, decks, balconies, porches,
gables, roof pitch, and elevation design standards;
new text end

new text begin (4) garage square footage; or
new text end

new text begin (5) common space, pools, or any common property necessitating a homeowner's
association.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end