Minnesota, Pennsylvania Advance Legislative Solutions for Unregulated Municipal Professional Fees
Unregulated and often excessive professional fees charged by municipalities during the development permitting process are becoming a problem for developers around the country. Builders associations in two states — Minnesota and Pennsylvania — have passed legislation for regulating these fees.

Both bill proposals get to the core of the problem of unregulated professional development fees. The Minnesota law, effective August 1 of this year, amends  the current statewide planning statute and clarifies and defines regulatory fees that can be imposed by the state's municipalities. The Pennsylvania legislation (SB 892) defines and clarifies regulations and actions relating to professional consultants. The bill has been passed by both houses and is currently in the Senate's Rules and Executive Nominations Committee.

Professionals consulted in the permitting process can include civil engineers, attorneys, land planners, architects and others. These professionals often demand higher salaries than other municipal positions or high hourly consulting fees, both of which can lead to or exacerbate budget shortfalls.  (See related article on municipal fiscal conditions.)

Because consultants are not public employees and their wages are not regulated, they can overcharge municipalities for their services. These over-charges are then passed onto developers. In some cases, cities condone the excessive fees as a way to deter development and slow growth or pad city budgets as an additional revenue source.

For more information on ways to regulate municipal development consulting fees, contact Ed Tombari in NAHB's Land Development Services Department at 800-368-5242, x8309. If you would like more information on the legislation, contact Sam Leyvas in State & Local Government Affairs at x8326.

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