A Minnesota Supreme Court case. A powerful lobbying association. A six-figure public relations effort. A senior economist with a Ph.D. leading the industry group. Affordable housing hijinks. Municipalities playing catch up with few resources. A split legislature. The sluggish speed of government. The brink of a moratorium on growth. Muddled media coverage.
High drama indeed.
In the end, the public policy positions of the Prior Lake City Council are concise and unanimous:
- Infrastructure development costs related to growth must be paid for by growth in a fair and equitable manner without burdening existing taxpayers.
- By making housing more affordable for some, we paradoxically cause housing to be less affordable for others.
- Municipalities must have statutory authority to charge reasonable infrastructure development fees.
- Fees must support projects with nexus to a development.
- Thoughtful prudence must be given when deciding what costs to socialize versus individualize.
- Markets dictate housing prices and fees.
As a result of the Harstad v. Woodbury Minnesota Supreme Court case last fall, growing municipalities like Prior Lake abruptly found themselves in a quagmire. Overnight it became illegal for cities to charge developers street impact fees. Street impact fees relate to necessary road improvements outside of a new development such as medians, turn lanes and stop lights required to handle traffic increases from new households.
City councils were faced with four options:
1) Increase taxes on existing residents to cover the necessary infrastructure development costs related to growth,
2) Garner necessary legislative authority to levy infrastructure development fees to fund municipal street improvements as a necessary component of growth,
3) Adjust existing funding mechanisms to meet the current legal framework or
4) Place a moratorium on growth.
Your council denied Option 1. We are diligently working on Option 2. We've commissioned a study to support Option 3. And we consider Option 4 to be a last resort.
In the meantime, your council and city staff find themselves in purgatory waiting to formulate Option 3, which should happen within months.
A development-in-process, The Meadows of Cleary Lake by Keyland Development, found itself in the middle of the chaos. The planned development on 20 acres near Cleary Lake was all but approved. Contracts were signed. Plans were blessed. Shovels were ready. All that remained was for the City Council to approve the final plat and development agreement at the April 1 council meeting.
But suddenly street impact fees in the agreement were rendered illegal. Conversations ensued. And the Keyland Development Company's ownership group and city staff collaborated and did the right thing.
To utilize the words of Housing First Minnesota Executive Director David Siegel from his March 27 letter to this paper, the parties leveraged a "collaborative approach that found balance" as we together seek a "thoughtful reimagining of housing policy in our state."
At the April 1 council meeting, Keyland voluntarily agreed to pay a significant dollar amount as a security deposit for necessary road improvements in the immediate area of their new development. Keyland recognized the need for growth to cover the costs of growth instead of asking current residents to pay these costs.
Keyland Development Company is owned by Prior Lake residents Gary Horkey and Rod Just. Keith Horkey and engineer Chris Ockwig were instrumental in this process.
These are good neighbors that did right by Prior Lake taxpayers, delivering a bright spot in a journey towards better public policy. A win-win-win-win — developer, homebuyer, taxpayer and city.
Kirt Briggs, Mayor
Zach Braid, Councilmember
Kevin Burkart, Councilmember
Warren Erickson, Councilmember
Annette Thompson, Councilmember