Building permit lawsuits appealed to Minnesota Supreme Court

The Minnesota Court of Appeals issued a split decision in March in the legal challenge over building permit fees in two fast-growing communities, remanding the case to the Hennepin County District Court, but an appeal from homebuilders may send the case to the Minnesota Supreme Court. 

In the consolidated matters of Housing First Minnesota vs. the cities of Corcoran and Dayton, a three-judge panel overturned a July 2023 decision from the Hennepin County District Court that the housing industry trade association lacks standing to challenge the cities’ building permit fees in late March. 

Supporting the decision, the opinion states that Housing First Minnesota’s members paid the permit fees, were responsible for an “overwhelming majority” of building permit fees for new single-family homes, and were required by law to pay the fees to build in these communities.

“Housing First’s members have a sufficient economic stake in challenging the allegedly excessive fee schedule to satisfy the requirements of the standing doctrine,” the court said.

The non-precedential opinion also upheld the lower court ruling dismissing Housing First Minnesota’s due process claims, noting “the cities were acting in a legislative capacity as opposed to a quasi-judicial capacity.” 

A recent decision from the U.S. Supreme Court issued 18 days after the Minnesota Court of Appeals ruling states that legislative and administrative fees are not exempt from the Takings Clause of the U.S. Constitution. In its petition for review by the Minnesota Supreme Court, attorneys for Housing First Minnesota wrote that Sheetz v. El Dorado, the new unanimous legal precedent, found “the Takings Clause applies to local government monetary conditions on a building permit.”

The appeal to the state’s top court is one of the first times the April 12 opinion from Sheetz v. El Dorado was cited in a legal filing in the country. 

In response to the petition for review by the Minnesota Supreme Court, the cities did not appeal the standing determination by the Court of Appeals but did contest Housing First Minnesota’s appeal. 

The Minnesota Supreme Court has until June 23 to decide to hear the appeal. 

Disclosure: The Appellant, Housing First Minnesota, is the publisher of Housing Industry News.