Minnesota Town Faces Lawsuit After Denying Controversial ‘Tiny Home’ Permit

by | Jul 30, 2025

Minnesota Town Faces Lawsuit After Denying Controversial ‘Tiny Home’ Permit

by | Jul 30, 2025

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The town of Blaine, Minnesota is facing a lawsuit from the Institute for Justice (IJ) after denying a permit for an Accessory Dwelling Unit (ADU) that plaintiffs Alex and Lynda Pepin were hoping to build in their backyard.

According to the suit, which was filed on July 7, the Pepins did everything by the book, and the only reason the City Council rejected the permit was because of concerns in the community about the kinds of people the Pepins were planning to put up in the ADU. In particular, the Pepins are hoping to rent the small unit at a below-market rate to families facing financial difficulties. Community members fear that this would mean bringing in drug addicts or other unsafe individuals, but the Pepins maintain that those are not the kinds of people they have in mind—especially given that they live in the main house on the property with their three homeschooled children.

Driven by their Christian faith, the Pepins have long been involved in charitable initiatives to provide housing for those in need. When the town of Blaine legalized ADUs (essentially tiny homes in a backyard, sometimes called mother-in-law suites) in 2021, they felt it was a perfect opportunity to continue their efforts closer to home, which would allow them to provide more direct personal aid to those who they were helping to house. A significant motivation for the town’s decision to allow ADUs was the growing housing crisis, which clearly continues to this day.

Now, however, facing pressure from residents because of the Pepin case, the town is second-guessing that decision. On May 19, two weeks after denying Alex and Lynda’s permit request, the town established a one-year moratorium on any application for the construction of ADUs.

“I definitely don’t want a homeless encampment or anything in my neighbourhood,” said one resident in an April Planning Commission meeting regarding the Pepins’ application. “Who will be responsible for the behaviour of whoever’s coming in and out?” asked another resident. The Pepins’ next-door neighbors even put a sign in their front yard saying “No ADU,” with an arrow pointing to the Pepins’ property.

The “homeless encampment” rhetoric is completely misleading, say the Pepins. They say they would only accept a family for their ADU that has been vetted by a local nonprofit and that is on a good financial path.

“Our family deeply believes in giving back—in using what we have to help those most in need,” said Alex. “It’s incredibly frustrating that the city council chose to ignore its own laws and block our efforts to provide a safe home to a family working to get back on their feet.”

“The Blaine City Council cannot ignore its own laws based on unfounded fears about who might live nearby,” said Matt Liles, a litigation fellow at IJ. “The Pepins are entitled to build a small home to help a family in need. Local governments should encourage, not punish, people who want to use their own property to address issues like housing affordability and homelessness.”

The NIMBYist (Not-In-My-BackYard) reaction of the Pepins’ neighbours is sadly a common one. Across the United States, towns regularly prohibit people from making even the smallest changes to their properties because residents fear it will negatively impact the “character of the community.”

As it happens, character is central to this story in more ways than one. The residents of Blaine are concerned about the character of their town in the sense of its culture, norms, demographics, and so on. But another relevant piece of this story is character in the sense of character traits—honesty, humility, generosity, and such.

The Pepins certainly strike one as people of character. Their devotion to helping those in need is undeniable. And their method of helping is not to demand coercive welfare programs from the government, but to give generously from their own savings. That means they have exercised responsibility to go out and earn money, frugality to save a portion of it, and then of course generosity in putting that money toward charitable initiatives such as affordable housing.

But what about the residents who are against the Pepins’ ADU initiative? What can be said about their character?

The judgment would have to be considerably different. Not only are they refraining from helping the Pepins, they are actively getting in their way. And why? Concerns about dangerous individuals would be understandable, but the Pepins have made clear that they have no intention of inviting such individuals to live in their proposed ADU. Thus, the motivation of the Blaine residents seems to boil down to a personal distaste for this kind of initiative taking place in their town.

There’s a word for when you put your own interests and preferences above the wishes of others. It’s called selfishness. And last I checked, selfishness is not a commonly cited character trait (Ayn Rand notwithstanding—I’m using the word in its colloquial, negative sense).

The ironic thing is that it’s often us libertarians who get accused of selfishness. Since we object to coercive government programs, we get told that we are anti-social, only looking out for ourselves and our freedom and never caring about the needs of others.

But this story perfectly demonstrates why that characterization (pardon the pun) is so far from the truth. Are the Pepins being selfish by objecting to this capricious government control? Are their neighbours being selfless and benevolent by getting in the way?

Indeed, imposing your own preferences on those who disagree simply so that you can have the kind of community you want is what’s truly selfish! And really, libertarianism is all about pushing back against the selfishness inherent in coercive government edicts. As Harry Browne once said to libertarians, “When someone accuses you of being selfish, just remember that he’s upset only because you aren’t doing what he selfishly wants you to do.”

Character has many components, some of which have already been listed. But one that is often overlooked is respectfulness, and specifically respecting the lives, property, and rights of others. It is a mark of common decency to refrain from weaponizing the government against your neighbors for your own gain. To indulge in this disrespectful practice reflects a conspicuous lack of character—specifically a selfishness so boundless that it has little care whether it tramples over others in the process of getting its way.

The point is this: the town of Blaine, Minnesota has a lack-of-liberty problem because, ultimately, it has a lack-of-character problem. The residents of that town are so morally compromised in this regard that they do not even have a basic respect for the rights of their neighbors to manage their private property as they see fit.

Not even for neighbors who are literally helping to house the poor.

IJ may win this case, but until that character problem gets fixed the residents of Blaine will keep inventing new excuses to meddle in affairs that are none of their business—and the evidence shows they will often get away with it.

This is why Lawrence Reed, among others, has gone to such great lengths to stress the centrality of personal character when it comes to achieving freedom. As he wrote in his 2018 book Are We Good Enough for Liberty?, “If you value liberty, you must understand that character is an indispensable ingredient—a necessary pre-condition—for a free society.”

The case of Blaine, Minnesota is merely the latest example of this eternal truth.

Patrick Carroll

Patrick Carroll

Patrick Carroll is a libertarian opinion journalist. He was formerly the managing editor at the Foundation for Economic Education.

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