Council debates proposed state bill to allow multifamily housing in commercial zones; seeks tailored exemption for cities with low commercial base

City staff and council members discussed a pending state bill that would allow multifamily housing in any commercial district, and examined possible impacts on Richfield’s commercial tax base and environmental justice concerns.

Community Development Director Melissa Pailman summarized staff concerns, saying the provision would reduce local flexibility and could undercut the council’s strategy to diversify the tax base. “We feel like a bill like this ties our hands,” Pailman said.

Why it matters: allowing housing in high‑value commercial corridors could reduce the city’s ability to preserve commercial land important to the tax base. Staff flagged the Interstate 494 corridor as Richfield’s most valuable commercial land and said housing there raises questions about long‑term health impacts from freeway proximity.

Council members debated options. Several members said they support the state’s goal of creating more housing but suggested a narrow exemption for cities with a low percentage of land devoted to commercial uses — for example, exempting communities where commercial comprises less than 20% of the tax base. Council member Hayford O'Leary said that approach would allow Richfield to “support more housing in Minnesota” while protecting local commercial objectives.

City Manager Andrew Rodriguez told the council that Richfield is viewed positively for supporting affordable housing and that the city could be an effective voice in legislative discussions. Council members agreed staff should pursue clarity and report back; one member said they planned to discuss the city’s position with state representatives and would describe the council discussion.