Builders Accuse Plymouth, Others of Permit Fee Overcharging
The city of Plymouth responded to accusations Monday that it overcharged home builders for permit fees.
The Housing Affordability Institute accused Plymouth and other Twin Cities metro cities of accumulating excess revenue on home construction projects.
The Housing Affordability Institute is the nonprofit arm of the Builders Association of the Twin Cities. According to its report, there’s a wide gap between what cities collect in building fees and what the costs to provide inspection services actually are.
The report argues that cities are propping up their general funds with excess fees, and in turn, making the cost of new homes more expensive. In Plymouth’s case, the report says the city collected more than $11 million in excess fee revenue over the last five years. The report says only Edina and Woodbury overcharged more.
City of Plymouth Responds
The city of Plymouth responded to the report. It released a statement to CCX News saying the report “understates the costs associated with new development,” resulting “in an incomplete picture.”
The city’s statement says the report also “overstates the impact of building permit fees on the affordability of housing. In Plymouth, building permit costs account for less than 1 percent of the sale price of a newly constructed home.”
Plymouth believes the report also placed “a disproportionate emphasis on cities with the highest new home valuations and the fastest pace of home construction.” The average new home in Plymouth sells for $600,000, significantly more than most new homes in Hennepin County.
The Housing Affordability Institute says up to one-third of a new home’s price in the Twin Cities comes from regulation and local policies. The city of Plymouth, meanwhile, says it “will work with state legislators in the coming months to ensure they have a complete picture of development costs, as well as the impact of those costs on new home buyers and longtime residents.”
Golden Valley Responds
The report listed Golden Valley of accumulating excess revenue from permit fees in 2017.
The city responded in a statement as well, saying the report presents an “incomplete and inaccurate picture of development fees” and that “builders and developers are involved in setting valuation and building permit fees do not adequately account for City costs.”
The statement also points out that in 2017, building permit revenue was unusually high due to three large multifamily projects–The Xenia, The Liberty and Talo Apartments as well as significant commercial construction.