Eviction moratorium lifted, $100 million in housing bonding in new law

Improving housing affordability, closing the homeownership gap and ending the governor’s emergency powers eviction moratorium are all components of the omnibus housing finance and policy law.

Sponsored by Rep. Alice Hausman (DFL-St. Paul) and Sen. Rich Draheim (R-Madison Lake), the law is effective July 1, 2021, unless otherwise noted.

Gov. Tim Walz enacted the state’s eviction moratorium via an executive order in March 2020 to ensure renters do not lose their housing during the COVID-19 pandemic.

Finding an off-ramp has resulted in an approach that includes support for housing providers and connects renters needing financial help with available resources.

Beginning June 29, 2021 and completed in stages over the next 105 days, the law prohibits renters who have applied for but haven’t yet received assistance from the state’s federally funded RentHelpMN program from being evicted until June 1, 2022.

Among the details, a landlord cannot terminate or fail to renew a lease until Oct. 12, 2021, except in cases where the tenant is endangering others, engaging in certain criminal activities, materially violating the lease or when the tenant requests the termination of the lease.

However, a landlord can terminate or not renew a lease beginning Aug. 13, 2021 if the tenant has not paid rent and is not eligible for the COVID-19 emergency rental assistance program.

Further, a landlord cannot file an eviction notice before Oct. 12, 2021 unless the tenant is a danger to others, there is significant property damage or they engage in criminal activity. Evictions would be allowed beginning July 14, 2021 for situations where a tenant materially violates the lease. An eviction notice can be filed beginning Sept. 12, 2021 if the tenant has not paid rent, nor is eligible for the COVID-19 emergency rental assistance program.

A landlord must provide a 15-day notice to a tenant before filing an eviction if the eviction is for nonpayment of rent during the 105 days following enactment of the law — Oct. 12, 2021. (Art. 5, Secs. 1-4)

The $125 million law includes $10 million in new General Fund spending:

• $3.25 million to the Workforce Homeownership Program;

• $2.8 million for the Housing Challenge Program;

• $1.75 million for manufactured home park infrastructure grants;

• $1 million for the Home Ownership Assistance Fund;

• $1 million for local housing trust fund grants; and

• $200,000 to establish a shelter provider task force to “develop standards for the provision of shelter; and examine the need for, and the feasibility and cost of, establishing state oversight of shelter.” (Art. 1, Secs. 2-3; Art. 6, Sec. 1)

Additionally, the law will provide $100 million in housing infrastructure bonds, designating $18.33 million of that total for single-family homes and $15 million for manufactured home park acquisition, improvement and infrastructure. The other $66.67 million is not specifically allocated. This takes effect Jan. 16, 2022. (Art. 4, Secs. 1-3)

If the state receives federal funds appropriated and dedicated from a federal infrastructure bill enacted between June 1, 2021, and Dec. 31, 2021 for loans and grants for the same purposes for which housing infrastructure bonds may be issued, the $100 million of housing infrastructure bonds is to be reduced by that amount. (Art. 4, Sec. 5)

Policy provisions, effective Aug. 1, 2021 unless otherwise noted, will:

• allow federally recognized American Indian tribes in Minnesota and tribal housing corporations to be eligible for housing grants in a natural disaster area;

• no longer require window fall prevention devices in one- and two-family dwellings and townhouses if windows meet certain criteria;

• clarify it is an unfair discriminatory practice for the owner of housing to deny a person with a disability the use of a service animal even when the physical identification is not present;

• prohibit a landlord from charging additional fees or rent for a service or support animal;

• allow a landlord to request supporting documentation for a licensed professional verifying a disability when a tenant makes a reasonable accommodation request for a service or support animal; however, no documentation is necessary when the disability is apparent to the landlord;

• increase from $27,000 to $37,500 the maximum rehabilitation loan for existing owner-occupied residential housing and permit such loans to be used for manufactured home replacement;

• increase the income limitation under the definition of “persons and families of low and moderate income” to 115% of the greater of state median income, or area or county median income;

• effective Sept. 1, 2021, require leases to have prorated rent when a lease ends before the last day of the month;

• create a process to affix a manufactured home to real property when the park the home is located in is owned by a nonprofit cooperative; and

• repeal the current process, and create new language, for making a manufactured home an improvement to real property. (Art. 2, Secs. 1, 4-5, 7, 9-11; Art. 3, Secs. 1-2, 4-5)

2021 First Special Session: SSHF4*/SSSF16/SSCH8

HF0004* / SF0016 / CH8