Updated: Tuesday, September 1, 2026

Monday, August 31, the St. Cloud City Council voted 4-2 in favor of raising building fees $800,000 per year starting January 1, 2027.

Does raising building fees make sense at a time when a city is falling behind in needed development? The answer from the Central Minnesota Builders Association (CMBA) is a firm “no.” This summer, CMBA wrestled with St. Cloud city officials over the proposal to dramatically increase the city’s building fees schedule. The increases fall heaviest on commercial projects, but also add significantly to the cost of each new residential unit of housing even as the city says it needs more homes in which people can afford to live.

The boost in building fees comes on the heels of major increases in St. Cloud’s SAC/WAC/TAC charges over the last four years. “These new fee increases will have a chilling effect on the development the City of St. Cloud says it needs,” said CMBA government affairs consultant Steve Gottwalt who testified against the increases at a recent City Council hearing. CMBA firmly opposed the building fee increases, testifying at each public hearing on the matter.

The city argued it was not taking-in nearly enough building fees revenue to cover its current permitting and inspections costs, and said it has been subsidizing those costs with property taxes.  But the city only offered broad budget numbers to justify its demand.  "It really is a false choice to say you have to raise fees or increase the property tax levy, " said Gottwalt. "The city could also right-size its expenses to match the current level of development and building revenues."

CMBA also reminded the City of St. Cloud it needs to follow Minnesota law. Under Minnesota Rules Part 1300.0160, building fees must be “fair, reasonable and proportionate to the actual cost of the service for which the fee is imposed.” The city never showed details of actual costs justifying each of its building fees and proposed increases.  The city also confirmed it directs 25% of its building fees into a general development fund, a practice that does not tie-back to actual costs.  Similar lack of transparency on building fees recently led to a Housing First Minnesota lawsuit against the Minnesota cities of Corcoran and Dayton – a case that is now before the Minnesota Supreme Court. The cities of St. Paul and Duluth face similar actions over building fees.

“CMBA prefers to collaborate with area leaders on development and building issues,” said CMBA executive director Wanda Schroeder. “We are partners in helping achieve the development our communities need and want.”  This is why CMBA hosts regular roundtable discussions with area mayors and city development directors, sharing plans and exploring ways to spur more development.  The association also brings builders and developers to the table for other stakeholder meetings concerning development in area communities.

“Affordability is an important goal for builders, developers and cities, and we need sustainable solutions that do not include raising the costs of development,” said Schroeder.

For more information:  Steve Gottwalt, CMBA Government Affairs, steve@cmbaonline.org, 952-923-5265.

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