Committee refers bill to allow multifamily housing in commercial zones with affordable bonuses

The House Committee on Housing and Finance Policy adopted the A3 amendment and voted to refer House File 2018 to the Elections, Finance and Government Operations Committee, advancing a measure that would legalize multifamily housing — including apartments and condos — in areas zoned for commercial uses and add incentives for affordable and workforce units.

Representative Kozlowski, sponsor of House File 2018, said the bill focuses on revitalizing main streets and commercial corridors by allowing multifamily projects where commercial zoning already exists, while subjecting projects to state building codes, public-health and infrastructure standards. Kozlowski told the committee the version before members removes some earlier aesthetic and energy mandates and excludes affordable projects from a mixed-use ground-floor requirement to avoid discouraging affordable development.

Supporters described the bill as a way to streamline approvals and reduce delays that make housing projects more expensive or infeasible. Cecil Smith, president and CEO of the Minnesota Multi-Housing Association, told the committee the bill is “a positive incremental step that will enable more housing to be produced in desirable and appropriate localities.” Amanda White, testifying from Florida, described Florida’s Live Local Act as a case study: she said the law’s land-use tools have led to more developments and cited an estimate that over 31,000 apartment homes were using those tools in Florida’s pipeline.

The bill creates an administrative review track (drawn from an existing statutory process referenced in testimony), allows cities to require mixed use in many locations while excluding heavy industrial zones, and establishes an optional density bonus for developers who include affordable or workforce units. Kozlowski said the bill does not mandate construction; rather, it makes certain multifamily uses permissible where permitted commercial uses already exist and creates predictable timelines for approvals.

Municipal officials and some Greater Minnesota speakers pressed for safeguards. Brian Baer, city administrator for Hugo testifying for the League of Minnesota Cities and Metro Cities, warned the committee that not all commercial parcels are appropriate for housing; he cited scrap yards, contractor yards, shooting ranges and other commercial uses that can generate quality-of-life impacts and said those contexts make immediate residential conversion problematic. City witnesses also flagged the removal of parking minimums, arguing some communities lack transit and would face on-street parking pressure if developers under-provide parking. Several city managers and administrators urged maintaining local control over parcel-specific suitability and the ability for public input on projects.

Kozlowski and supporters said the bill includes protections for public health and safety, administrative timelines to reduce unpredictable delays, and density bonuses to make affordable projects more financially viable. The committee adopted the A3 amendment by voice vote and then referred the bill to Elections, Finance and Government Operations.