Workforce Housing Grants

The lack of workforce housing in Greater Minnesota has been discussed at great length in many committees during the 2015 Legislative Session. This shortage of housing and the issues behind it – including the reasons why developers need incentives in order to build market-rate housing in rural parts of the state – were explained in-depth at the Senate Environment, Economic Development and Agriculture Committee this week.

Committee members were told that investors are hesitant to build new housing in some rural areas because the construction costs could not be recouped through the current rental rates. Rural officials are concerned that housing shortages will force businesses to leave, cost their cities jobs, and hurt the local economy.

The committee heard a proposal this week to provide grants to local units of government for market value workforce housing needs outside the metropolitan area. In order for communities to qualify, the average vacancy rate must be 3% or less for a two year period, the city population must be at least 1,000, and the project must include a written statement from employers with at least 20 full-time employees that indicates the lack of available housing has impeded the company’s growth.

This legislation proposes an appropriation of $10 million over the FY16-17 biennium. The bill was laid over for possible inclusion in the omnibus bill. (S.F. 468)

Senate DFL Media