Minneapolis advances fee hike for land use applications

The Minneapolis City Planning Commission voted Tuesday to increase the land use application and sign permit fees, the first increase to the fees in over five years.

The city’s land use fees no longer cover the administrative costs of land use applications, leading to the city subsidizing some of the cost of process. If this continues, a staff report on the topic said, the general fund would need to cover the cost of application reviews and public hearings.

The city staff also recommended a new fee for reviewing tenant eligibility for some affordable units when insufficient information is provided by a property manager. This fee will cover the administrative costs of the review and will cost $125 per file reviewed.

The increase is based on calculations from the consumer-price index, an often used measurement for inflation. Since 2017, the last time there was an increase in the fee costs, inflation has increased 22%, according to the report. The new application fees increase between 18% and 21%.

Dorothea Martti, a communications manager for the city, said in a statement to Finance & Commerce that a Minnesota statute requires zoning fees to be an ordinance, which in turn makes amending the fees more complex than the average city fee.

“These fees are adjusted less often compared to many other types of fees, which are adjusted annually. As a result, zoning fee increases can appear to be a little more substantial even when simply adjusting for inflation since the previous fee adjustment,” Martti said.

Planning Commission Chair Chris Meyer noted that the adjustment to fees should be moved to an inflation adjustment.

“I think that’s something that we should try to fix, something that could be recommended to be added to the city’s legislative agenda,” Meyer said. “I think it would be better to have gradual increases that match inflation rather than a big sharp increase all at once.”

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