House OKs bill with new funding aimed at tackling Minnesota's affordable housing shortage

At $75 million above the February forecast base, the House Housing Finance and Policy Committee claimed the largest budget target increase of any committee.

This allocation may have eased the path to crafting a budget in an evenly split House, and housing committee members in both caucuses say the investments will produce long-term benefits. They argue that access to safe and stable housing is the cornerstone of the American Dream.

On a 106-25 vote Tuesday, the House passed a bill that would allocate $242 million to the Minnesota Housing Finance Agency for loan and grant programs and $77.7 million to the Minnesota Management and Budget for debt service. And HF2445/SF2298*, would authorize the sale of $100 million in housing infrastructure bonds.

The bill now returns to the Senate, which has a $3 million increase for housing in its General Fund target. Its bill was passed 40-24 April 22.

[MORE: State funds tied to zoning reform in housing bill that advances in House]

The bill stands on the pillars of providing diverse, stable and affordable housing options, said Rep. Spencer Igo (R-Wabana Township), the bill sponsor and co-chair of the housing committee alongside Rep. Michael Howard (DFL-Richfield).

"I’m proud that we came into the room and made housing a nonpartisan issue,” Igo said, adding the committee target shows the House is committed to addressing a housing crisis represented by a shortage of 106,000 homes across the state.

[MORE: Download the spreadsheet]

Rep. Huldah Momanyi-Hiltsley (DFL-Brooklyn Park) praised a provision that would direct an additional $30 million to the state’s Family Homeless Prevention and Assistance Program, which provides emergency rent, mortgage and utility help.

Estimates say $3,500 can resolve a crisis to prevent a family from losing their home compared to $45,000 to rehouse them. “At the heart of this bill is a simple yet powerful truth — we have a duty to make sure Minnesota families do not fall into homelessness," Momanyi-Hiltsley said at a news conference earlier in the day.

Howard said the bill would keep 20,000 people in their homes.

It would provide $20 million for the Greater Minnesota Housing Infrastructure Grant Program, which could cover half the costs for developing lots — up to $40,000 for single-family developments, $60,000 for single-family homes, and $180,000 for multi-family homes.

Additional new funding proposals include:

• $10 million for Greater Minnesota Workforce Housing Development to expand rental housing for workers;
• $10 million for the Housing Challenge Program to increase affordable housing options;
• $2 million for grants and loans to improve infrastructure in manufactured home parks;
• $500,000 to establish a statewide renter’s hotline; and
• $150,000 to create an accessible housing task force.

Rep. Natalie Zeleznikar (R-Fredenberg Township) successfully offered an amendment that would require the accessible housing task force to include a member aged 65 or older.

Although most of the additional funding is one-time, $7.6 million would go to service bonding debt.

‘Yes to Homes’ initiatives

Over the past few years legislators in both parties have introduced bills to preempt local zoning ordinances, such as requirements of large lots or three-car garages that drive up the cost of homes, according to proponents of the Yes to Homes Legislative Agenda.  

The bill aims to offer a carrot rather than a stick, Howard said, by introducing incentives for communities to revise land-use and zoning policies.

The housing agency would grant extra points to projects in communities that allow multi-family housing in commercial areas, permit denser housing options like duplexes, accessory dwelling units or smaller lots, limit private parking requirements, or reject aesthetic mandates. Per an amendment adopted, the boost could be no more than 5% of the total available points.