VOL. 9 ISSUE 4, DEC. 2025
THE MINNESOTA HOUSING INDUSTRY NEWS SOURCE BY HOUSING FIRST MINNESOTA • HOUSINGINDUSTRYNEWS.ORG
Court of Appeals sides with code official in rulemaking case “What does the building code say, and what does it mean?” This question has long had the potential to cause angst with builders, architects, code officials, and trade partners. In October, it resulted in a Court of Appeals ruling that found the Minnesota Department of Labor and Industry (DLI) was enforcing an unpromulgated rule. Under Minnesota law, an administrative rule, like building codes, must follow and be developed under a specific process outlined in state law. The opinion, while binding in this specific matter, is a nonprecedential opinion, meaning it cannot be cited in any future court cases. Background The building official in this case was Todd Geske of MetroWest Inspections, concerning a DLI investigation of a home he inspected. DLI required airflow at each supply register and return in single-family homes to be balanced within ±10% of design airflow—a standard not formally adopted into rule. The dispute arose from an October 2022 State Building Code Appeals Board hearing on whether Geske properly closed a building permit. Geske applied ACCA Standard 5, which allows a ±20% variation in airflow balancing, citing it as the industry standard. DLI argued that Section 309.2.1 of the Minnesota Mechanical Code applied, which limits variation to ±10% at each register in a single-family dwelling. Geske maintained that Section 309.2.1 governs mechanical ventilation systems supplying fresh air, not heating and cooling air distribution systems. An administrative law judge upheld the Appeals Board’s decision in June 2023. Geske appealed, and the Court of Appeals heard arguments in July 2025. From the Experts Chris Boline, who submitted a friend-of-the-court brief on behalf of Housing Industry News Publisher Housing First Minnesota, said, “The decision provides stability for Minnesota’s single-family housing industry at a time when secure and affordable housing is in
INSIDE THIS ISSUE HIGHER RENTS FIRST-TIME BUYER DEMAND FILTERS TO RENT
REDUCE SAVINGS FOR FIRST-TIME BUYERS
HIGHER EXISTING NEW HOME PRICES
DELAYED HOMEOWNERSHIP
NEW HOME DEMAND FILTERS TO EXISTING
INSUFFICIENT NEW CONSTRUCTION
2025 Legislators of the Year PAGE 8 HIGH NEW CONSTRUCTION COSTS
Housing Market Report PAGE 10
Ribbon Cutting at Veteran Village Figure showcasing the self-reinforcing cycle of declining homeownership, discussed in the new report from Housing Affordability Institute
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New release from Housing Affordability Institute highlights declining homeownership in Minnesota A new report shows the decline of homeownership in Minnesota, analyzing the housing shortage and high cost of construction in the state—both significant contributing factors to the declining homeownership rate. The report, published by Housing Affordability Institute, highlights insights from Elliot Eisenberg, Ph.D., a housing economist whose experience includes previously serving as the senior economist for the National Association of Home Builders. The paper investigates Minnesota’s homeownership rate, a metric in which it was once a regional leader. The Institute
found a severe shortage in new home construction at the root of the problem, which has led to some of the highest construction costs in the region. This imbalance of supply and demand cascades into the existing home market and the rental market, driving up prices for all renters and potential homeowners. “This report highlights the consequences of not addressing the housing crisis,” said Peter Coyle, board chair of Housing Affordability Institute. In 2024, the homeownership rate in Minnesota was 71%, down 300 base points and the first time since 2008 the state has not been the regional leader
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in homeownership. The path to owning a home is becoming increasingly out of reach. The median price of an existing home in the state is $342,625, while the median price of a new home has climbed to $526,644. These prices mean 56% of Minnesota households cannot afford an existing home, and 75% cannot afford a new home. Since 2021, metro-area permits are down 43%, and the state’s total housing permits are down 35%. If Minnesota continues this trend, the 98,000-home shortage will grow exponentially. That shortage doesn’t just mean higher home prices—the Institute estimates a CONTINUED >> PAGE 4
First-time buyers fall to 40-year low as market affordability tightens The share of first-time homebuyers has fallen to a historic low, according to the National Association of REALTORS® (NAR)’s 2025 Profile of Home Buyers and Sellers. The annual report shows that firsttime buyers made up just 21% of all home purchases between July 2024 and June 2025—the lowest level since NAR began tracking the data in 1981. CONTINUED >> PAGE 12
HOUSING INDUSTRY NEWS
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