2024 Legislative Session Summary

By Libby Murphy, Director of Policy

The interesting end of the 2024 session marks the end of the biennium. While 2024 may have felt a bit status quo, it was an incredible biennium for housing. Over the biennium, lawmakers invested more than $2B in affordable housing initiatives and homeless services and prevention. The coalition of partners that came together on efforts like ending Source of Income Discrimination and local land use and zoning reform demonstrate the breadth of organizations recognizing the importance of housing and the role of state government electeds to take action to ensure all Minnesotans have access to safe, affordable, and healthy housing.

Earlier in session, leadership agreed to appropriate $10 million in one-time funds to support housing-related initiatives and $50 million in Housing Infrastructure Bonds. Despite limited new funding, lawmakers took action to redirect $50M in 2023 appropriations to improve housing conditions and services for residents in existing subsidized housing. Below is a breakdown of funding in the housing article.

Housing Infrastructure Bonds$50MHIBs support a variety of housing development and preservation activities. This year, lawmakers expanded eligible uses to include the development of cooperatively owned affordable housing
Housing Affordability Preservation Investment Program$50M*The new program will finance the recapitalization of distressed housing properties. *Funds provided are redirected 2023 appropriations.
Family Homeless Prevention & Assistance Program (FHPAP)$8.1MFHPAP provides emergency rent, utility, and other payments to keep families stably housed.
Minnesota Homeless Study$100KGrant to the Amherst H. Wilder Foundation
Expediting Rental Assistance$471KFunds will help implement recommendations developed to get emergency rental assistance to households as quickly as possible.
Single-egress stairway study$225KRequires the Department of Labor and Industry to assess the life safety outcomes of allowing single-egress stairways in apartment buildings with three or more stories.
Supreme Court$545K 
Task Force on Long-Term Sustainability of Affordable Housing$200KEstablishes a task force to evaluate the financial challenges to develop, operate, and preserve safe, affordable, and dignified housing.
Working group on common interest communities and homeowner associations$200KCreates a working group to assess the prevalence and impact of CICs and HOAs.
Propel Nonprofits$100KTo support a needs analysis for emergency shelter serving transgender adults experiencing homelessness.

To fund preserving existing subsidized housing that is at imminent risk of loss, lawmakers redirected 2023 appropriations from various programs into the Community Stabilization Program.

Challenge Program($7M)
Workforce Homeownership Program($3M)
Supportive Housing($15M)
TOTAL reallocated resources$25M

Lawmakers made several adjustments to set asides in the Community Stabilization Program.

Wilder Park Association$3.25MMajor capital repair
Multiunit rental housing$41.75M$10M was already set aside in 2023 for Aeon.
Single-family housing$10M 
Recapitalization of distressed buildings$50MUp to $15M is for preservation or recapitalization of supportive housing.

Policy Changes

The second year of the biennium is when lawmakers tackle policy proposals. This year, lawmakers made several policy changes.

Housing Infrastructure Bond eligibility: 1) Clarifies that qualifying supportive housing projects must set aside half of all units for individuals and families who are without a permanent residence. 2) Expands qualifying foreclosure or abandoned housing projects to include affordable home ownership in addition to rental housing. 3) Adds financing of cooperatively owned housing that is affordable to low- and moderate-income households as an eligible use. 4) Excludes substantial rehab projects of four or more units from including accessible units that exceed Americans with Disability Act requirements. 5) Modifies accessibility requirements on new construction projects of four or more units so that each accessible unit includes at least one roll-in shower, water closet, and kitchen.

Comprehensive Plan Clarity: Exempts cities from being sued under the Minnesota Environmental Review Act. Ensures cities can move forward with their comprehensive plans without the threat of environmental lawsuits. The law applies retroactively to plans that date back to March 2018.

Local Affordable Housing Aid (aka Metro Sales Tax) and Statewide Local Housing Aid eligible uses clarity: Expands eligible project uses to now include: 1) financing the operations and management of financially distressed residential properties; 2) funding of supportive services; and 3) costs of operating emergency shelter. Exempts substantial rehab projects from including units that exceed ADA requirements.

Local Affordable Housing Aid and Statewide Local Housing Aid maintenance of effort: Requires cities and counties to supplement, not supplant, existing local expenditures on housing.

Community Stabilization Program modifications: Expands the Community Stabilization Program to support recapitalization of distressed buildings in addition to preserving naturally occurring affordable housing (NOAH). Redefines single-family housing as housing that is one to four units and does not require the housing to be currently owner-occupied. Adds single family housing in areas where residents are at risk of displacement and where there is a risk of losing owner-occupied or single-family rental housing in addition to communities with significant deferred rehabilitation needs. Defines “distressed building” as an existing rental housing building income restricted to households at or below 60% of area median income (AMI) that is: 1) at imminent risk of foreclosure, closure, or sale that would result in loss of affordability; 2) has two or more years of negative net operating income; 3) has two or more years with a debt service coverage ratio less than one; 4) has repair, replacement, or maintenance costs that exceed reserves. Defines “recapitalization” as financing for the physical or financial needs of a distressed building. Adds recapitalization as an eligible use. Makes clear that funds can be used to acquire single-family rental housing intended for ownership conversion. Creates criteria for prioritizing recapitalization grants and loan awards to projects in which: 1) residents are at or below 30% of AMI; 2) buildings are at imminent risk of foreclosure, closure, or sale; 3) operators with a path to achieve neutral or positive net operating income within five years; 4) operators committed to keeping properties affordable; and 5) buildings that are not eligible or not prioritized for other agency programs. Requires recapitalization recipients receive financial support from private lenders.

Report on Low Income Housing Tax Credit Senior Rental Housing: Instructs MHFA to produce a report on senior renters in LIHTC properties. They must gather data on the annual percentage changes in AMI, Social Security cost-of-living adjustments, and inflation. and the number of times rents increased to the maximum allowable increase.

Expediting Rental Assistance implementation: Requires MHFA, in consultation with others, to annually project emergency rental assistance needs. Requires MHFA to deliver emergency rental assistance in a way that is culturally responsive and trauma-informed. Instructs MHFA to process applications within two weeks and, if approved, make payments to landlords within 30 days. Mandates MHFA to develop an e-signature option for applications for the Family Homelessness Prevention and Assistance Program. Requires MHFA to make recommendations to the legislature to simplify the verification process of applicants.

Prevailing wage program expansion: Requires projects of ten or more units receiving LIHTC from any allocating agency pay prevailing wages.

Wage theft prevention and use of responsible contractors: Requires projects receiving funding from MHFA verify that every contractor or subcontractor performing work on the project meets responsible contractor criteria. Developers of projects in which contractors or subcontractors fail to pay required wages on a project receiving funding from MHFA must develop a wage theft prevention plan to be eligible for further funding from the agency. MHFA cannot fund a project sponsor whose contractors or subcontractors failed to pay required wages on an agency-funded project within the past three years.

Decarbonization and climate resilience: Amends Minnesota Housing’s mandate to include decarbonization and climate resilience in addition to energy conservation. The statute directs MHFA to assist in the installation of resources and equipment that improve clean energy, greenhouse gas emission reductions, and climate resiliency in addition to energy efficiency. The bill expands the powers of the agency, so programs align with this expanded mandate.

Rent and income limits: Allows MHFA to adjust income or rent limits on any multifamily capital funding program to align with federal rent or income limits of the Low-Income Housing Tax Credit Program (LIHTC) and Tax Exempt Bonds.

Additional reporting to the legislature: Requires MHFA to report annually on competitive development award programs funded with state appropriations.

Modifications to eligibility for agency programs: Allows MHFA to determine household or unit eligibility if the household or unit participates in other income-based state or federal public assistance benefit programs.

Workforce & Affordable Homeownership Development Program expanded uses: Expands eligible uses of funds to include affordability gap.

Workforce Housing Development Program population amendment: Amends eligible project area to remove population minimum requirements.

Greater MN Housing Infrastructure Grant Program modifications: Adds counties as eligible grant recipients. Adds manufactured home developments as eligible projects. Increases the maximum grant amount from $30,000 to $40,000 per single-family to fourplex and adds a grant amount of no more than $60,000 per manufactured housing lot. Excludes manufactured housing developments from the $500,000 award cap to a county or city.

State Housing Tax Credit set asides removal and disqualified contributor clarification: Removes the small community, single-family, and deeply affordable set asides. Allows MHFA to award SHTC funds as grants and loans. Adds individuals whose immediate family members made contributions or own the housing as disqualified contributors. Clarifies that disqualified individuals and businesses “directly” own, control, or hold power to at least 20 percent of the business entity.

First-Time Homebuyer, Fee-Based Home Purchase Financing Program requirement removal: Removes the requirements that eligible homeowners reside in census tracts where at least 60% of occupied housing units are renter-occupied.

What Didn’t Pass

Source of Income (SOI) Protections: Lawmakers ran out of time to find a path forward to end source of income discrimination in housing. SOI discrimination disproportionately impacts Black, Indigenous, and people of color households, households with children, households with individuals with disabilities, veterans, and seniors. The prevalence of SOI discrimination means families who have waited years to get on a waiting list—and then waited even more years to get housing assistance—often must return their housing assistance because they cannot find a landlord willing to take payments from housing assistance programs.

Land Use/Zoning Reform: Lawmakers failed to act on any land use and zoning reform proposals. Proposals ranged from upzoning residential neighborhoods to allow for more “missing middle housing,” allowing small-scale apartment development on transit corridors, and bypassing not-in-my-back-yard favored local processes to allow multifamily development as of right in commercial areas. Proposals would have also capped local authority on imposing things like roofing and siding materials, the inclusion of decks and overhangs, and more aesthetic mandates. Advocates also tried clamping down on antigrowth policies like excessive parking minimums, lot sizes, and setback requirements. Read MHP and Habitat for Humanity’s report on Land Use and Zoning Reform.

State Housing Tax Credit Unused Credit Carry Over: Lawmakers failed to carry over unused tax credits from 2023 and apply them to 2024. Rolling over unclaimed tax credits could have provided an additional $5M for development.

Constitutional Amendment for Housing: The Our Future Starts at Home Coalition went into the 2024 session knowing housing would not be on the ballot in 2024. The coalition focused on recruiting additional coauthors and working with authors to intensify their support. When the budget targets were announced mid-session, and they were small, the chairs of the House and Senate housing committees articulated the need for an amendment to dedicate resources to housing.

Updates to Landlord/Tenant Law

The 2023-2024 Minnesota Legislature passed several provisions to strengthen tenant protections and codify “best practices.” HOME Line conducted a webinar on June 12 that it will, hopefully, upload soon.

Here are a few highlights from Session Law Chapter 118/ S.F. 3492:

Right to Organize: Tenants won the right to organize by establishing associations to address living conditions, amenities, and community life. Tenants who share the same landlord but live in different properties may join into association together. Landlords cannot prohibit or retaliate against tenants passing out flyers and holding meetings. Landlords who don’t comply with the new law, which goes into effect on January 1, 2025, can be fined.

ITTNs option: Landlords must provide prospective tenants with the option of submitting a Social Security number or an individual taxpayer identification numbers (ITTN) on rental applications. ITTNS, which are issued by the IRS, allow people without Social Security numbers to file taxes. ITTNs allow undocumented immigrants to verify income and apply for leases. Landlords cannot deny a rental application solely on the basis that the prospective tenant provides an ITTN. This law goes into effect January 1, 2025.

Remedy options when a unit is not ready for occupancy: Landlords must provide an option for remedy to a tenant if the unit the tenant signed a lease agreement for is not occupiable. Landlords must notify every affected tenant prior to the move-in date and offer alternative housing, payment from the landlord, or termination of the lease agreement and a refund of all amounts paid. If a tenant seeks alternative housing through the landlord, the tenant may terminate the lease agreement if the original unit is not available for occupancy within 90 days of the initial move-in-date.

Effort to rent abandoned units: Landlords are required to make reasonable efforts to rent an abandoned units at fair rental value. The abandoning tenant is not liable for rent after the landlord has entered into a new rental agreement. If a landlord does not use reasonable efforts to rent the unit, the tenant is not liable for rent after the date the landlord has notice of the abandonment.

Early termination of lease for domestic violence victims: Tenants who are victims of violence and terminate their lease early cannot be evicted. Victims of violence are no longer required to meet with a professional who offers supportive services while in the process of terminating their lease early.

Rental application denial prohibited: Landlords may not deny a rental application when there is a pending eviction action, when a nonpublic court file has been expunged, or when any eviction action has not resulted in a write of recovery and order to vacate.