State funds tied to zoning reform in housing bill that advances in House

The House Housing Finance and Policy Committee finished its budget bill Wednesday, moving HF2445 as amended with a delete-all amendment to the House Ways and Means Committee.

Sponsored by Rep. Spencer Igo (R-Wabana Township), the bill would provide $319.62 million from the General Fund for the Minnesota Housing Finance Agency, which includes a $75 million increase over February’s forecast base. The bill would also authorize the sale of up to $100 million in Housing Infrastructure Bonds.

“I was thrilled to see the strong housing infrastructure bond position we have in the bill,” said Rep. Matt Norris (DFL-Blaine). He hopes a good portion of the funds could be used to support residents of manufactured homes, which is a good source of naturally occurring affordable housing.

[MORE: Written testimony]

Rep. Michael Howard (DFL-Richfield) successfully offered an amendment that would provide incentives for communities to adopt pro-housing policies. It would require Minnesota Housing to prioritize projects in communities that meet one or more of the following conditions:

• allow housing in commercial districts;
• allow duplexes, accessory dwelling units or townhomes in residential zones and don’t require a separate approval process for those units;
• don’t require more than one parking stall per residence;
• don’t require lots bigger than 1/8 of an acre; and
• don’t have aesthetic mandates.

Howard said the change would make it easier to build housing, especially affordable housing, and would help state funds go further because ordinances requiring things like large lots and two- or three-car garages add to the cost of building homes.

Greater Minnesota Partnership Executive Director Darielle Dannen said the amendment would impact all Minnesota Housing programs. She cautioned about using a blunt instrument that could apply to tax credits and support services, but appreciates the incentive-based approach.

Bills that would preempt local zoning ordinances were unable to cross the finish line in previous years.

The amendment and the bill as a whole earned endorsements from both sides of the aisle.

“This is great,” said Rep. Jim Nash (R-Waconia). “But we have a long way to go. This might chip away at the 106,000 homes that we need to build, but the day of slow play needs to end.”