FFM Bulletin 7/31/08

Selling your house? Better ask the city for permission first

The City of Columbia Heights is the latest metro-area municipality to consider imposing a "point-of-sale" inspection requirement on all home sellers. The city council on Monday debated the "Residential Inspection Before Sales" (RIBS) ordinance that would force homeowners to pay the city to inspect their house prior to putting it on the market. The city-mandated inspections are on top of, not in lieu of, private inspections. Following the city's inspection, the homeowner is required to make any repairs the city deems important. Homeowners that fail to make these repairs are not permitted to sell their property.

In other metro cities with point of sale requirements in place, homeowners have been forced to make cosmetic repairs involving peeling paint, cracked windows, and damaged gutters. In other words, point of sale ordinances are not about encouraging transparency and full disclosure, which everyone agrees is critical in real estate transactions. Instead, as the City of Richfield acknowledges, the inspections "are a community effort to maintain the quality" of their neighborhoods and "are not for the benefit of the buyer or seller."

And unfortunately, the Columbia Heights city council appeared prepared to extend this burden to its residents. The Star Tribune reported that the point of sale ordinance was "likely to receive final approval" at Monday's meeting.

Well a funny thing happened on the way to passing an arbitrary and invasive big government ordinance...

Opponents of Columbia Heights' governmental overreach turned out in force at Monday's city council meeting to register their displeasure with the proposed ordinance and those that supported it. According to some reports, well over 100 citizens showed up at the meeting to stand up for private property rights. In the end, the council got the message and voted unanimously to reject the ordinance.

Unfortunately, several other metro cities - including Bloomington, Crystal, New Hope, and Brooklyn Park - already have point-of-sale ordinances in place. Fees in these cities range from $100 up to $275 per inspection.

According to the Star Tribune, Brooklyn Park has conducted more than 800 point-of-sale inspections in the past year and the city required 97% of those homeowners to make repairs. And that's not surprising, considering the remarkably broad scope of the Brooklyn Park ordinance, which was passed to ensure that residential property in the city is "maintained in a safe, clean, and healthy condition" and intended to "protect and promote the public health, safety and general welfare of the city and its residents." Of course, those are vague and nebulous statements whose meaning is ultimately decided not by homeowners, but by bureaucrats. But according to the City of Brooklyn Park, the "government knows best" approach is working. A Brooklyn Park city engineer says that inspectors have "discovered some frightening things" and have "saved several lives." Maybe that's true. But when big government isn't busy saving your life, you can always count on it to complicate it.

New Brighton city council votes to curtail its own eminent domain powers

The City of New Brighton voted unanimously last week to restrict its own ability to take private property through eminent domain, going further than the modest restrictions signed into state law in 2006. According to the Pioneer Press, the ordinance requires the city council to "hold three public hearings before it can authorize eminent domain, in addition to requiring two-thirds of the entire council to approve that [the seized property is] being used for a public purpose and not primarily for economic development."

And there's good reason for New Brighton to put these restrictions in place. The city has had more than its share of eminent domain and economic development debacles.

Take, for example, the Northwest Quadrant redevelopment project. The Northwest Quadrant involves the redevelopment of 100 acres of "underutilized" land into a mixed-use neighborhood with retail, parkland, 700 new homes and a half-million square feet of office space near Old Highway 8 and Interstate 694. It is by far the largest redevelopment in the history of New Brighton with an anticipated value in 2015 of over $217 million.

At least that was the original plan. In reality, the project has thus far been an unmitigated disaster.

The city began by acquiring 18 private properties via eminent domain, displacing businesses and angering many residents. Instead of using "eminent domain" as a last resort, many claimed the city used it as their first. Shortly thereafter, the city discovered that it had drastically underestimated the amount (and cost) of environmental remediation the site required. And from there, it's only gotten worse.

Since 2001, the city has spent more than $55 million to acquire property and build infrastructure, as well as conduct some of the environmental cleanup work. Unfortunately, they've done a better job of spending money than raising it. In February of this year, New Brighton estimated that the project would have at least a $4.1 million deficit by 2009. By 2010, the city will have lost $12 million.

A major dispute with the lead housing developer has also plagued the project. New Brighton spent several months late last year and early this year arguing over the project's timeline with developer Rottlund Homes. Rottlund later backed out of the project and in May, New Brighton was forced to return $950,000 to the developer.

It's hard enough to lose your home or business to government. To lose it for an ill-conceived "economic development" project that may never materialize is devastating. And yet that's exactly what happened to 18 property owners. The city displaced vibrant businesses and replaced them with virtually nothing, all in the name of "economic development." Hopefully the irony isn't lost on New Brighton policymakers.

In the end, the New Brighton city council deserves credit for voting to curb their own power. It's just too bad they can't make it retroactive.

Freedom Foundation of Minnesota fall internships available

The Freedom Foundation of Minnesota is hiring interns for this fall to assist with research and communications projects. Interns will assist with FFM's government transparency and accountability initiative, monitor cases of government waste and abuse, and help maintain the FFM website. Interns will also work on the Minnesota Votes program, a website that tracks every single bill and vote at the Minnesota legislature. Part-time and full-time internships are available beginning in September. Interested applicants should send a resume to Jonathan Blake.

Stay In the Loop

Stay Up To Date

Sign up today for our
e-update to find out what is
going on in your state and
local government.

FFM Tipline

We will do our best to uncover the wasteful spending you report.