Housing budget funds support programs for a host of housing hardships

From state rental assistance to homelessness prevention to homeownership opportunities, a new law will fund assistance to challenges across the housing continuum.

Effective July 1, 2023, unless otherwise noted, Rep. Michael Howard (DFL-Richfield) and Sen. Lindsey Port (DFL-Burnsville) are the sponsors.

HF2335*/SF2566/CH37

Money, money, money

Beginning Oct. 1, 2023, 0.25% Twin Cities metropolitan area sales tax increase will be imposed for housing purposes. Half of the revenue will be dedicated to a metropolitan city aid account, 25% to the state rent assistance account, and 25% to the metropolitan city aid account.

The law will appropriate $1.07 billion to the Minnesota Housing Finance Agency over the 2024-25 biennium, split to assist homeless people, struggling renters, and aspiring homeowners. Additionally, the state’s housing agency will have expanded bonding authority and may issue up to $30 million of housing infrastructure bonds. (Art. 3; Art. 5, Secs. 1-2)

Funding for homelessness prevention and assistance includes:

• $65.54 million for the Family Homeless Prevention and Assistance Program, which received an additional $50 million in a different 2023 law;

• $25 million onetime to establish the supportive housing program; and

• $5.5 million for the Homework Starts with Home program.

The law will dedicate millions of dollars to rental-related aide and rental construction projects, such as:

• $200 million onetime for the housing infrastructure program, some of which may go toward supportive housing for people without permanent residence;

• $120.85 million for the Economic Development and Housing Challenge Program to fund the development of affordable rental housing;

• $90 million onetime to establish the community stabilization program to preserve naturally occurring affordable housing;

• $46 million to establish a rent assistance program;

• $39 million for the Greater Minnesota Workforce Housing Development Program;

• $23.29 million for the housing trust fund account;

• $10.68 million for the rental housing assistance program for persons with a mental illness or families that consist of at least one adult with a mental illness;

• $8.44 million for the affordable rental investment fund program;

• $7.49 million for rental housing rehabilitation; and

• $6.29 million in capacity-building grants. (Art. 1, Sec. 2)

For homeownership prospects, the law will spend:

• $100 million to establish the community-based first-generation homebuyers down payment assistance program as a pilot project;

• $51.77 million for the homeownership assistance program;

• $50 million onetime to establish the first-generation homebuyers down payment assistance fund;

• $40 million onetime to establish the homeownership investment grants program;

• $20.5 million for the Workforce Homeownership Program;

• $10 million onetime to establish the first-time homebuyer, fee-based home purchasing financing program as a pilot project;

• $6 million for a grant to Build Wealth Minnesota to provide a family stabilization plan program;

• $5.54 million for owner-occupied housing rehabilitation;

• $3.71 million for the Homeownership Education, Counseling, and Training Program; and

• $3 million onetime for stable housing mediation. (Art. 1, Sec. 2)

Miscellaneous appropriations — like manufactured home park funding — include:

• $50 million onetime to establish the stable housing organization relief grant program to support nonprofits experiencing significant detrimental financial impacts;

• $15 million onetime for public housing rehabilitation;

• $17 million for manufactured home park infrastructure loans and grants, some of which may go to cooperative-owned parks;

• $10 million onetime to establish a manufactured home lending grant program;

• $10 million onetime grant to Northcountry Cooperative Foundation for the conversion of manufactured home parks to cooperative ownership;

• $10 million onetime for the high-rise sprinkler system grant program;

• $5 million onetime to establish the Greater Minnesota Housing Infrastructure Grant program;

• $4.8 million onetime for local housing trust fund grants;

• $4 million onetime to establish the lead safe homes grant program;

• $1 million to the Northland Foundation to assist local governments to establish local or regional housing trust funds; and

• $200,000 onetime to Minnesota Management and Budget for a study on expediting rental assistance payments. (Art. 1, Secs. 2-3)

Policy changes

The Minnesota Housing Finance Agency, instead of Minnesota Management and Budget, will be the recipient of certain deposits for the housing trust fund and the manufactured home relocation trust fund. This will take effect July 1, 2024.

Cities with populations over 20,000 will be required to report to the state fire marshal a list of buildings with housing units at least 75 feet above fire department vehicle access that lack sprinkler systems by June 20, 2024. Updated lists are to be provided by June 30, 2027, and June 30, 2032.

The list of exceptions to the 30-year duration limit on housing covenants will expand to include affordability covenants required by a government entity, effective Aug. 1, 2023. (Art. 6, Secs. 1-3, 10, 13

HF2335* / SF2566 / CH37