The DNR Adjusts

In the last several months, the Supreme Court has eviscerated the DNR’s ability to directly manage shoreline property development.  The DNR had exercised review authority over shoreline variances and insisted that its agency rules overrode local ordinances, even when local ordinances had been DNR-approved.  Those powers have now vanished, and in March the DNR suggested that it was going to simply challenge “bad” local decisions in district court.

Today’s Star Tribune reports that the agency is following through on that plan.  As it turns out, for all the Court has done to limit the DNR this year, the Krummenacher variance decision will likely give the agency its mojo back.  The DNR has sued a township in western Minnesota to nullify a variance granted to allow a lake home within 15 feet of the shoreline.  The news story, and the Star Tribune’s prior reporting, makes clear just how much of a seismic shift the Krummenacher holding creates; local officials in the area estimate that 70% – 90% of variance requests are approved by local officials.  In the past, just about anybody who presented something out of line with zoning was simply advised to apply for a variance.  Again, if the use made sense (or at least didn’t offend anyone), the variance was easy to get as long as the “problem” arguably creating the need for a variance wasn’t the owner’s fault.  At this point, cities and towns should just stop suggesting that owners should seek variances, as the standard is now extremely difficult to satisfy.  That, and if it involves a shoreline, bluffline, or scenic area, the DNR will sue you for approving it.

Public Broadband, Ctd.

A good followup on the running battles between telecom companies and the cities and counties trying to spur broadband growth.

New Law: Energy Improvement Assessments

A part of the jobs legislation signed by the Governor last Thursday includes authorization for local governments to establish PACE bond programs.  To recap, the purpose of the program is to allow building owners to borrow money for energy upgrades and repay the loan through a property tax assessment.  Along with potentially more favorable rates, this arrangement would tie the debt to the property instead of the individual, making larger projects more attractive to owners.  The program is entirely voluntary, and does not require the creation of special districts.

Getting a program started will require a local ordinance incorporating the minimum requirements from the statute, as the power to assess is related to the city’s ability to assess for service charges and similar items in 429.101.  At a minimum, project requests must be supported by an “energy audit” or “renewable energy system feasibility study,” the improvements must be installed by licensed contractors, and energy-generating improvements have to be barred from selling their excess energy or transferring it offsite.  The building owner’s credit is not a factor, but the local government is required to look at “ability to repay” before approving a project.  The law then authorizes the local government to issue revenue bonds to pay for the approved projects, backed by the assessment agreements with participating building owners. 

The provisions of the law went into effect April 2, so local government programs can get started.

Local Government Grants in Health Care Law

A component of the health-care reform legislation signed into law today is the creation of “Community Transformation Grants.”  Once the program is up and running, the Department of Health and Human Services will award competitive grants for “evidence-based community preventive health activities.”  Local governments (including school boards), state agencies, non-profit organizations and tribal organizations are all eligible to compete for grants.  “Infrastructure changes” are emphasized as part of the program, a strong sign that local governments will do very well in the competition for these grants (non-profits generally don’t build sidewalks).  The article linked notes some of the obvious targets of these grants – sidewalk and street improvements that encourage kids to walk to school, promote bicycle use, and make it more inviting for seniors and others to enjoy a walk outside.  However, the criteria are reasonably broad: “creating the infrastructure to support active living and access to nutritious foods in a safe environment”; “addressing special populations needs”; “developing and promoting programs targeting a variety of age levels to increase access to nutrition, physical activity and smoking cessation, improve social and emotional wellness, enhance safety in a community, or address any other chrinic disease priority area identified by the grantee.”  Under the right circumstances, you could see development incentive funding for grocery stores and restaurants, grants for community-center programs, money for community policing, and similar programs alongside the building projects.

It’s hard to link directly to the language, but the grant program is at Section 4201 of the bill passed this weekend (HR 3590).

New Way for Housing Improvements?

I’ve only quickly skimmed through this idea, but it seems like it could be an extremely effective tool to allow energy retrofitting, solar panel installations, or many of the other environmental upgrades that need to take place at the level of individual buildings.  Right now we are relying on private lending (people taking out home equity, consumer credit, or paying out-of-pocket) to get these projects done, if people are motivated to do these things.  Along with simply being more debt, these measures also force homeowners to “recover” the value, either by living in their home for an extended period of time, or by selling their property at a price high enough to pay off the extra investment.  In the current housing market, the latter is definitely not a promising path.  This proposal, on the other hand, would allow the bond to ride with the property tax, meaning that the homeowner is not under the gun to recover the value if they end up selling – the payments go over to the next owner.

This could really help older condos, apartments and association-run developments.  As it stands, there is an alternative to private lending, if your city is willing to create a Housing Improvement District.  If it goes through, your association can then get financing through municipal bonds, or other government lending, paid for by a “fee” on you property tax bill much like a special assessment.  However, the process is cumbersome – not bad for a government program, but still cumbersome.  A minority of residents in your district (35%) can kill the project completely.  The HIA rules don’t always line up with association bylaws.  It’s a good program, but one that a direct-lending program that does essentially the same thing, like these property-tax payable bonds, is better suited to solve.

A bill needs to pass the Legislature before this could happen.  It appears that there isn’t one currently pending.  Unless there’s something I’m missing, that should change, and soon.

I’m sure you’ve read this elsewhere, but …

Judge Gearin got it right on unallotment.  I’m glad the Governor is appealing; this use of unallotment, and Gearin’s order, are broad enough to give the courts an up or down vote on the whole idea.

Lake Elmo’s Trade Barriers, Revisited

Lake Elmo’s mayor submitted an op-ed response to the Pioneer Press (appearing 12/17) concerning the story I wrote about last week.  The Mayor quickly gets out the point that the “homegrown law” is really a land-use regulation.  He frames the issue as one of a rogue landowner – it sure seems to be just one, based on the op-ed – who won’t abide by the City’s zoning code.  So far, so good.  If this is just about unchecked land use, then the City is on solid ground.

Unfortunately, it’s not.  At one point, the Mayor sets up a strawman: what if your neighbor turned his garage and front yard into a used car lot and kiddie play-place?  The implication is that “commercial” uses should only take place on “commercial” property.  Trouble is, Lake Elmo’s code allows this particular neighbor to sell flowers, pumpkins and Christmas trees from their farm property.  The mayor terms it an “exception,” but a conditional use permit is not an “exception” to zoning in any way, shape or form.  It’s an integral part of the regulation, and the owner is completely entitled to a permit if they meet criteria (see today’s other post).  The City can either eliminate the category of use (again, farmers have a more or less unfettered state-constitutional right to sell their own produce), or grant permits to owners that qualify.

Since there’s no real issue of “commercial” use versus “farm” use, the “grow your own” restriction seems to be the only issue at stake here.  Here, the gist of the original news article – a “homegrown law” creates winners and losers based on the source of the products offered for sale – unavoidably raises Commerce Clause issues.  Another way to say “create winners and losers” is to say the City “discriminates.”  A state or local government can occasionally adopt regulations which discriminate against out-of-state commerce, but it needs a very good reason that stands separate and apart from the goods’ place of origin.  There also needs to be no other way to accomplish this very important goal except to discriminate against out-of-state products.  It’s hard to see how this particular law stands under that standard, or any proposed compromise which would allow a certain percentage of “foreign” goods to be sold.