Committee considers bill to spend more than $1 billion on efforts to ease Minnesota’s housing crunch

Sleep outside. Spend your check on your landlord. Say goodbye to the “American Dream.”

In every corner of the state, Minnesotans struggle with housing.

To address problems with homelessness, renting and homeownership, Rep. Michael Howard (DFL-Richfield) sponsors HF2335, the omnibus housing finance bill, which would appropriate $1.1 billion to the Housing Finance Agency over the 2024-25 biennium.

Howard said the proposal is the “most comprehensive bill to address our affordable housing crisis that this Legislature has ever considered.”

The House Housing Finance and Policy Committee received a walkthrough of the bill and its corresponding delete-all amendment Tuesday. Amendments are expected to be offered and the product adopted Wednesday.

Rep. Michael Howard

The House has already passed two bills for over $250 million for homeless services this session. The omnibus bill proposes another $75 million in fiscal year 2025 for the Family Homeless Prevention and Assistance Program and $5 million over the 2024-25 biennium for the supportive housing program.

Slimming down a previous $1 billion request, the bill would also authorize $200 million in housing infrastructure bond sales.

Metro area shoppers would help pay as well via a proposed 0.25% sales tax increase, distributing proceeds to metropolitan county aid, a state rental assistance program and metropolitan city aid.

To prevent homelessness, a considerable amount of the bill proposes rental assistance, preservation of affordable housing, and development of new homes, such as:

• $150 million to establish the community stabilization program;
• $100 million to establish a statewide rental assistance program;
• $50 million for the Challenge Program;
• $40 million for the workforce housing development program;
• $25 million in fiscal year 2024 for the manufactured home lending grants program;
• $10 million in fiscal year 2024 for the manufactured home park cooperative purchase program;
• $10 million to establish a stable housing organization relief program;
• $8 million for capacity-building grants to provide affordable housing and related services;
• $5 million for a new Greater Minnesota housing infrastructure grant program;
• $2 million for the bridges rental assistance program; and
• $300,000 to create a legislative task force to study how to expediate rental assistance payments.

[MORE: View the spreadsheet]

Less funding than initially requested, Howard still says the so-called “Bring it Home” bill, included in the omnibus package, could provide an estimated 6,000 state-based housing vouchers over the next four years for families.

The rent assistance program could support “cost-burdened” households making up to 50% of the area median annual income but paying more than 30% of said income on rent.

Before becoming eligible for the aforementioned housing program or Section 8 vouchers, the smaller appropriation for the bridges rental assistance program could close a gap in assistance, providing support for families with at least one adult with mental illness until they become eligible for another housing program.

“When we don’t have stable housing, we don’t have good mental health. And for people who live every day with mental illnesses, housing is absolutely critical for recovery,” said Elliot Butay, senior policy coordinator at the National Alliance on Mental Illness Minnesota.

Much of the rest of the bill’s proposed spending focuses on homeownership, including:

• $150 million in fiscal year 2023 to establish the first-generation homebuyers down payment assistance fund as a pilot project;
• $80 million over the 2024-25 biennium for the homeownership investment grants program;
• $10 million to establish the pilot project of a first-time homebuyer, fee-based home purchase financing program;
• $2 million during the 2024-25 biennium for the homeownership education, counseling and training program; and
• $2 million to Build Wealth Minnesota for a family stabilization program.

Commissioner Marion Greene says Hennepin County has the largest share of cost-burdened households in Minnesota who are “disproportionately Black, Indigenous and households of color.”

She supports down payment assistance for first-generation homebuyers which may “begin to bandage the state’s history of housing discrimination” and believes the metro county sales tax is critical to provide ongoing funding to the housing continuum.

Not everyone is a fan of the metro sales tax, however.

Ania McDonnell, government relations specialist for Metro Cities Minnesota, appreciates the down payment and rental assistance proposals, but opposes substituting traditionally state-funded programs with a tax that would disproportionately affect those in the metropolitan region. “State programs are state goals and objectives and as such should be financed with state revenue sources.”

Additional provisions

A $10 million appropriation in fiscal year 2024 would go toward a high-rise sprinkler grant program; forrmerly known as the “Dustin Luke Shields Act,” $4 million would be appropriated in fiscal year 2024 to establish the lead safe homes grant program; and $1.5 million would go to establish a housing mediation program in fiscal year 2024 to settle disputes between landlords and tenants out-of-court.

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What’s in the bill?

The following are bills that have been incorporated in part or in whole into the omnibus housing finance bill:

• HF11 (Howard)
• HF12 (Agbaje)
• HF302 (Howard)
• HF743 (Norris)
• HF814 (Norris)
• HF918 (Agbaje)
• HF950 (Brand)
• HF1215 (Agbaje)
• HF1412 (Howard)
• HF1440 (Howard)
• HF1472 (Hassan)
• HF1507 (Fischer)
• HF1667 (Howard)
• HF1696 (Norris)
• HF1874 (Kozlowski)
• HF2344 (Lislegard)
• HF2415 (Noor)
• HF2585 (Hassan)
• HF2632 (Hussein)
• HF2763 (Howard)