Housing is the foundation of safety, wellbeing, and growth in our communities. This historic $1b investment in stable and affordable housing will lead to better educational outcomes for our kids, improved physical and mental health for Minnesotans everywhere, and to better pathways to careers and growth in our communities. Nothing goes well for any of us unless we have a safe place to call home.
Building New Affordable Housing
This session the Senate DFL led the way in passing the largest investment in building new affordable homes in Minnesota’s history. ~590,000 households are currently paying over 30% of their income on housing, and rising rental and homeownership costs have outpaced income in nearly every area of the state. The majority of this historic $1b investment was directed towards increasing our state’s supply of affordable homes, which in combination with a new rental assistance program and targeted homebuyer support offers a robust and well-rounded response to our state’s housing crisis.
- Housing Infrastructure Program ($200m): The Senate DFL’s investment in Housing Infrastructure will construct, preserve, and acquire over 2,000 units of affordable rental housing, single-family homes, senior housing, manufactured home parks, other critically important housing opportunities across the state. Every community in Minnesota is struggling with the rising costs of housing, and this funding for housing stability and affordability will have untold benefits for families everywhere.
- Challenge Program ($95m): The Challenge Program is our state’s most flexible source of housing funding, and it prioritizes the development of affordable rental and single-family housing. This investment is projected to create over 1,000 new housing opportunities. Minnesota currently has the 3rd worst housing deficit in the nation, and the Senate DFL’s focus on developing accessible and affordable housing opportunities across the state will directly address the root cause of the housing crisis.
- Greater MN Workforce Housing Development ($35m): Development and rehabilitation of over 1,000 units of single-family workforce housing will help to meet the unique housing needs in Greater Minnesota. Towns and cities in rural Minnesota depend on attracting new professionals and young families, and this investment will ensure that our communities can continue to grow and thrive.
- Workforce and Affordable Homeownership ($20m): Creating new workforce housing opportunities, including by supporting deeply affordable manufactured home park units, was a top priority of the Senate DFL this year. Communities across the state are facing inflation, rising interest rates, and increasing costs of labor and supplies. This investment in workforce housing will be especially impactful in Greater MN, and is absolutely necessary to help increase inventory and allow small towns and cities to grow.
- Local Housing Trust Fund Grants ($4.8m): Grants will help meet the individual needs of local communities by providing very flexible funding that may be used on financing new housing, providing matching funds for state and federal resources, funding downpayment assistance, and funding a wide variety of other local housing needs.
- Manufactured Home Parks ($35m): Funding across several programs will offer essential support to manufactured housing communities this year. Grants for critically needed home park infrastructure were a top priority, and a new revolving loan program will allow residents to purchase the parks they live in and form cooperatives. Manufactured homes offer some of the most affordable housing opportunities statewide, and are Minnesota’s largest source of NOAH.
- Naturally Occurring Affordable Housing ($90m) A new Community Stabilization program will preserve ~2000 units of naturally occurring affordable housing (NOAH) at deeply affordable level. MN does not currently have a state appropriation for NOAH, and this investment will help to preserve the declining availability of deeply affordable housing across the state – keeping units accessible for working families and Minnesotans of all backgrounds.
Rental Assistance and Homelessness Prevention
This year, the Senate DFL made the largest step towards ending family homelessness in Minnesota’s history. Ensuring that every family has stable housing will improve educational outcomes, health outcomes, career opportunities, and provide untold benefits to families and communities across the state. This unprecedented investment will save lives by preventing the disastrous consequences of homelessness. Growth and success start with stable housing, and we have achieved that goal with the most meaningful investment in housing affordability that our state has ever seen.
- Bring it Home ($46m/year): The Bring it Home rental assistance program will allow families everywhere to spend money that is currently burdened by rent on healthcare, education for their children, groceries, car repairs and any number of essential needs.This new foundation of housing stability will be especially impactful for low-income families, communities of color, seniors, individuals with disabilities, and working families in Minnesota. Bring it Home rental assistance vouchers will be available for households at or below 50% AMI, and will cap rent costs at 30% of income for an estimated 150,000 households.
- Metro Sales Tax: A new 0.25% metro sales tax will help to fund the new Bring it Home rental assistance program as well as local housing aid for the metro region to construct new housing, provide emergency rental assistance, and meet other important local housing needs. Housing is the single most regressive cost in our society, and more than 590,000 renters statewide are paying over 30% of their income on housing. In addition to providing ~3,000 rental vouchers a year, this revenue is projected to create 10,000 new affordable rental units, as well as 10,000 affordable homeownership opportunities over ten years. If a family spends $20,000 in taxable purchases, they will pay an extra $50 for this new tax. The projected revenue is $353.2m in FY 24-25, and $392.4m in FY 26-27, and spending on public housing is an allowable use.
- Family Homelessness Prevention and Assistance Program ($95m): Emergency rental assistance through FHPAP is our state’s most influential tool in preventing evictions and helping families stay in their homes. This funding will impact over 20,000 households, saving lives and helping to avoid the disastrous consequences of homelessness. Our investment will also help to significantly ease the current strain on emergency shelters and eviction courts.
- Task Force on Expediting Rental Assistance: A new task force to study ways to expedite the distribution of emergency rental assistance funds will help to prevent evictions, ease the strain on eviction courts, and help landlords to receive past-due rent. The burden on landlords caused by delays in processing rental assistance applications was a central complaint of Senate Republicans this year, and this task force will help to provide relief for renters and landlords alike.
- Homework Starts with Home ($1m/year): Providing rental assistance and homelessness support for families with children will improve educational outcomes and housing stability across the state. ~20,000 individuals struggle with homelessness each year in MN, nearly half of which are children. Growing this deeply successful program will go a long way towards reducing youth homelessness in Minnesota.
- The Bridges program ($1m/year) Rental assistance vouchers for individuals with a disability or mental illness will prevent homelessness and help to connect individuals to healthcare services, providing desperately needed support for some of the most vulnerable members of our state.
- Stable Housing Organization Relief Fund – SHARE ($50m): This new program will provide one-time grants to nonprofits which have been impacted by the COVID-19 pandemic and other recent economic challenges. Funds can be used for a wide variety of purposes, including operating costs, rent forgiveness, property maintenance, and other housing stability services.
Homeownership and Closing the Racial Homeownership Gap
Minnesota has the 5th largest racial homeownership gap in the nation, which is currently worse than it was in the 1950s. The Senate DFL’s investment in homeownership opportunities, including a new First-Generation Homebuyer Assistance program, is directly targeted at closing these disparities by helping families take the final steps towards owning their home.
- First-Generation Homebuyer Assistance ($150m): This new program will significantly close racial homeownership disparities by providing forgivable downpayment assistance to over 6,000 households, enabling families to take the final step towards buying a home. Of this amount, $100m is directed to the nonprofit MMCDC for distribution through CDFIs, while the rest goes directly to MHFA’s existing downpayment assistance program.
- Homeownership Assistance Fund ($50m, included above): Downpayment assistance has been made available for MHFA’s existing program to provide funding to first-time homebuyers, which includes individuals who have not owned a home for the last three years.
- Build Wealth ($5m): Funding to Build Wealth MN, including for a new 9,000 Equities program, will provide downpayment assistance and homebuyer support to families of color in the metro.
- HECAT ($2m): Increasing funding for the Homeownership Education, Counseling, and Training program will provide homeownership services including foreclosure prevention to an estimated 9,090 households – with an emphasis on closing the racial homeownership gap.
- Fee-Based Home Purchasing Program ($10m): A new pilot program through Neighborworks Home Partners will provide interest-free first-time homebuyer financing support. Forgivable fee-based loans will allow for alternative avenues towards homeownership, especially for homebuyers from Muslim communities. As of 2019, 90% of Minnesota’s Somali community rent rather than own a home.
The Senate DFL passed a transformational and long overdue update to our state’s tenants’ rights this year which will help to level the playing field between renters and landlords. Many of these updates have already been adopted by most other states in the country, and establishing a fair standard of safety and legal equality between landlords and renters will help to take a major step towards increased equity in Minnesota’s rental system.
- 14-Day Notice: Families most often fall behind on rent during times of crisis or due to events which are out of their control. Minnesotans should never have to find out that an eviction has been filed against them by receiving a court summons, and landlords must now provide a resident with a detailed 14-day notice before filing an eviction for nonpayment of rent. Minnesota was one of only four states in the nation which did not have a prior notice law prior to the passage of this historic bill.
- Eviction Expungements: Evictions records are one of the largest barriers towards finding stable housing for tenants, especially considering that eviction cases remain visible on a tenant’s record for seven years, regardless of the outcome. Courts can now order discretionary expungements if they find that an expungement is in the interests of justice and does not outweigh the public’s interest in knowing about an eviction record. Courts are also now required to expunge eviction records when a tenant wins a case, when a case is dismissed, if a case is settled, if both parties agree to an expungement, or when three years have passed after the eviction was ordered.
- Crime Free Ordinances: Landlords should never be able to unilaterally revoke a family’s housing based on alleged activity, and under this new law they may no longer terminate leases or impose penalties onto tenants for conduct which occurred off the premises of their property. Crime free ordinances have proven to worsen our racial housing disparities, and they have no place in Minnesota. Crimes of violence committed against another tenant, the landlord, or an employee are exempt from this new law.
- Right to Counsel: Right to counsel has been established for tenants of federally funded public housing in breach of lease eviction cases, leveling the playing field and ensuring that every renter has fair representation. Studies show that representation in housing court significantly reduces eviction rates, and counsel under this new requirement must have at least two years of relevant experience.
- Prohibited Fees: Landlords are now required to disclose all nonoptional fees in a lease agreement, as well as in any advertisements for a unit. This must include whether utilities are included in rent. This fair and simple update will increase transparency for renters and prevent deceptive practices which lead to families struggling to pay their rent.
- Heat requirements: Landlords are now required maintain a minimum temperature of 68 degrees Fahrenheit within their units from Oct 1st through April 30th, unless a utility company requires otherwise. Every home deserves a fair standard of safety and comfort, and this protection will be especially impactful for low-income families.
- Landlord Entry: New protections establish a fair standard of privacy by requiring landlords to give at least 24-hours’ notice before entering a unit, which must specify a time of anticipated entry between the hours of 8:00am and 8:00pm. Tenants may allow landlords to enter with less than 24-hours’ notice at any time by granting permission.
- Early Renewal: For leases which are ten months or longer, landlords are no longer able to require a tenant to renew their lease until six months before the lease expires. This language came from student advocates, and is directed at addressing predatory practices which particularly harm student renters.
- Emergency Relief: Tenants now have a significantly strengthened ability to petition for emergency relief, including repairs for broken appliances, infestations, and other urgent issues.
Did not pass:
Zoning and Regulatory Reform
Addressing zoning updates and other reforms to housing and development regulations will be a top priority of the Housing Committee next year. Zoning reform is a deeply important piece of addressing our housing crisis and promoting the development of affordable homes, and the Senate DFL has been clear from the start of this session that reducing barriers to affordable development will be a main focus of our policy solutions over the summer and at the start of next session.
A bill prohibiting corporate entities from purchasing or owning single-family homes and converting them into rental properties did not pass this year. The language will be worked on over interim and may be included again next year.
Source of Income Protections
The section of the housing omnibus bill which would have banned discrimination against renters based on the acceptance of public assistance was removed based on concerns that it could have potentially forced landlords to enter contracts with Section 8 applicants. The Dept. of Human Rights has expressed intent to pursue legal action separate from this bill related to source of income protections.
Housing Infrastructure Bonds
The legislature issued no new Housing Infrastructure Bonds this year, instead funding new development with one-time cash. This decision avoids the need to pay debt service on bonds and allows for more flexible spending by MHFA to meet the specific needs of our current housing crisis.
Housing Cost Reduction Incentive Program
A new pilot program to reimburse cities for up to 50% of fees for new housing developments did not make it across the finish line this year. This program was aimed at reducing rising costs of labor and infrastructure, especially for small communities which are struggling to finance new housing.
Other Tenant Provisions
Several tenant protection provisions were heard in committee this year, but were not included in the final omnibus bill. These included protections for tenants who lose their income, as well as new standards for handling abandonment of rental units. Further discussion on these provisions will take place over interim, and they may be included in an additional tenant protection bill next year.
*See the Health and Human Services and Taxes sections for additional Housing and Homelessness Prevention initiatives*