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Report by Hibo Ali, MHP's Capitol Pathways intern for 2021. 

MHP hosted its third State and Legislative Update Series of the year on February 5, 2021. MHP heard from Minnesota Housing Finance Agency (MHFA) Commissioner Jennifer Ho, Senator Rich Draheim (R, 20), Dave Anderson of All Parks Alliance for Change (APAC), and Natividad Seefeld of Park Plaza Cooperative.

State Update
MHFA Commissioner Jennifer Ho and Chair of the Senate Housing Finance and Policy Committee, Senator Rich Draheim, joined MHP to talk the Governor’s budget, Senate Housing priorities, and more.

Commissioner Ho highlighted the significance of priorities laid out in the Governor’s Budget Proposal during COVID-19. Commissioner Ho emphasized that importance of making certain investments during COVID-19 in order to aid in economic recovery. She went on to call the budget the “COVID-19 recovery budget”. Commissioner Ho also noted the strong effect housing has on almost every other aspect of daily life (e.g., kids in schools); if housing is invested in early on or proactively, a lot less money and focus is spent in these other areas. Additionally, Commissioner Ho reiterated the point that low-income folks have undoubtedly been hit the hardest “both by the pandemic and the economic fallout” that ensued. Finally, when asked about the prospects of a source-of-income discrimination proposal, Commissioner Ho said she was “hopeful” but that it is still too early to bet on prospects.

Sen. Draheim, who currently chairs the Senate Housing and Finance Policy Committee, previously served on Governor Dayton’s Task Force on Housing. Sen. Draheim explained that while there are many intricacies of housing policy that range from topics of “homeownership to homelessness to everything in between,” there is a need to conceptualize housing policies a little more “outside the box.” Sen. Draheim then laid out his current housing priorities. His priorities include addressing the racial homeownership gap in Minnesota, finding an off-ramp for the eviction moratorium, figuring out a way to handle the COVID-19 Housing Assistance Program, creating a pathway to homeownership, and addressing housing instability/homelessness.

Community Perspective
Executive Director of All Parks Alliance for Change (APAC), Dave Anderson, and president of Park Plaza Cooperative, Natividad Seefeld, joined MHP to discuss what is happening with manufactured housing in Minnesota.

Anderson highlighted the large role manufactured housing plays in providing affordable housing throughout the state. Anderson shared a few of APAC’s proposals this legislative session to combat some problems faced by manufactured home park residents. One of these proposals includes the need for resident opportunity to purchase––this includes a 60-day advance notice of intended park sales and negotiating with home park residents in good faith. Additionally,  Anderson emphasized the need for a proposal that ensures rent stabilization. Finally, Anderson spoke about the feasibility of these proposals as they are already in effect in a number of states.

Seefeld reiterated many of Dave’s points. Seefeld explained the significance of giving home park residents the opportunity to purchase. Seefeld pointed out that this was especially important in cases where homes are simply too old to move; this puts residents that aren’t given the opportunity to purchase the land beneath their home in a very tough position. Seefeld was glad to share that they successfully secured Rep. Connie Bernardy as an author to an opportunity to purchase bill that will undoubtedly help many Minnesotans.

 

 

 

 

Joe Weis, a Rochester-based affordable housing developer for more than 5 decades, died over the weekend at 88. Joe was an active advocate for housing for under-resourced people, and he had a long history with the Minnesota Housing Partnership. 

Many MHP staff remembered Joe as an advocate for affordable housing and for assisting MHP in a range of ways. He and his business, Weis Builders, were contributors to MHP’s Investors Council. He served as a board member from 2006 to 2015. But his history with MHP goes back even further. 

Chip Halbach, MHP’s founding executive director who retired in 2017, remembered Weis: 

“Joe Weis was recruited to the MHP board of directors to bring the perspective of a private sector developer creating affordable housing in Greater Minnesota. What I came to appreciate over the nine years of Joe’s board service was his keen wit and intellect, his willingness to listen to all points of view, and, above all, his deep commitment to improving the housing conditions of low income people.”

Warren Kramer, MHP’s Director of Community Development, recalls MHP working with Weis on their first LIHTC project in the late 1990s. 

“Mark Agnessi and I were hired to help with Weis’s first ever tax credit application for a 100 unit apartment building in Rochester.  At the time, it was one of the top 10 largest deals MHFA had ever done with MHP serving as a 'Processing Agent' with Weis.  As was his custom, Joe handed out big cigars to some of us that were involved in getting the project financed.  We (MHP) did several other projects with Weis Builders and their related companies before they developed the capacity to do it on their own.  Joe Weis was awesome.”

MHP staff recall that Weis attended every affordable housing meeting or event that he could. 

“It was an absolute given that he would ALWAYS ask a question of any speaker or panel if there was a Q&A,” remembers MHP Director of Fund Development Luke Avery. “If you were MHP staff and  circulating microphones you had to  know where he was sitting, because someone was going to have to get over to him and if he was called on, he wouldn’t wait for the mic if it didn’t show up immediately.”

“He also always, always engaged with MHP's policy work,” recalls Libby Murphy, MHP’s Deputy Policy Director. “Even on vacation, he'd pick up his phone to assist. He was a great champion of MHP's policy agendas throughout the years.”

He was known for wanting to build good places for under-resourced people to live, and he told the Rochester Post-Bulletin in 2016: “It is satisfying work."

"We extend our sympathy to Joe’s family and his extended circle of friends and housing advocates,” MHP Executive Director Anne Mavity said. “He was a forceful champion of affordable housing and will be missed.”  

MHP's Deputy Policy Director, Libby Murphy, gives this recap of MHP's State and Federal Legislative Update from Jan. 22.

 

As part of Minnesota Housing Partnership’s (MHP) biweekly state and federal legislative update series, MHP heard from Representatives Kaohly Her (DFL, 64A) and Aisha Gomez (DFL, 62B), community leader Melanie Benjamin, as well as National Low Income Housing Coalition’s Vice President of Public Policy, Sarah Saadian.

State Update
House Majority Whip Kaohly Her and Chair of the newly formed Preventing Homelessness Division, Rep. Aisha Gomez, joined MHP to discuss their housing priorities for the 2021 legislative session.

Rep. Her emphasized her support for housing policy calling it the “center of the intersection” of education, healthcare, and job opportunities. Rep. Her discussed her previous support for housing bills in the last biennium and laid out her current priorities. Some of these priorities from the last biennium carried over to his legislative session and include tenant protection, repealing certain requirements around housing tax credits, and appropriating money for housing mediation for eviction protection. When asked how we ensure that we don’t move forward in this legislative session with a deficit mindset, Rep. Her explained that since costs are inevitable, it is best that the bill is footed on the front end. Rather than spending money on the back end through emergency shelters, emergency medical care for unhoused folks, and other emergency sources, Rep. Her explained that providing affordable housing from the beginning is much more fiscally sound and easier to achieve.

Rep. Gomez, who is also in her second term of the Minnesota House, reiterated many of Rep. Her’s points. Rep. Gomez  said she hopes that with recent increased visibility of those experiencing homelessness, resources can be brought to serve those communities. Speaking on homelessness, Rep. Gomez explained that it is undoubtedly the result of “policy choices and benign neglect.” Rep. Gomez said she hoped that she can listen to folks facing these issues with her newly created committee in order to properly respond to their concerns. This, along with tenant protection, investing in public housing, increasing access to homeownership for BIPOC Minnesotans, and addressing the eviction crisis (especially affecting BIPOC communities) are all on Rep. Gomez’ list of priorities this legislative session. Rep. Gomez was also asked how we ensure that we don’t move forward in this legislative session with a deficit mindset. Rep. Gomez emphasized the importance of not buying into the idea that we don’t have enough money to allocate to these much-needed policy efforts; she further explained that coming into a legislative session with a deficit mindset will almost always result in budget cuts on the “backs of our communities” (BIPOC, children, those in poverty). 

Community Perspective
Melanie Benjamin, Chief Executive of the Mille Lacs Band of Ojibwe, spoke about some of the unique challenges faced by Indigenous communities. Since the 1990s, the Mille Lacs Band has focused on providing more housing opportunities for members on and off reservation land. Despite working closely with HUD, the Band received limited investments and was only able to build five houses per year. That pace was not keeping up with demand so Band leadership decided to allocate a percentage of its revenue to housing, which gave the Band an opportunity to provide low-interest mortgage loans to members. Despite these efforts, many members struggled to get loans to help build new housing because they could not secure conventional loans for property built or held on trust land. These barriers have contributed to the fact that the Mille Lacs Band has over 300 people on its housing waiting list. In an effort to serve as many members as possible, the Mille Lacs Band has often focused its homeownership efforts on building and owning property off of reservation land. Chief Executive Benjamin said she hopes new legislation from U.S. Senator Tina Smith that passed in December will help address some of the Tribe’s issues with securing loans and mortgages.

Chief Executive Benjamin also highlighted how a negative relationship with a county can have hugely consequential impacts on the tribal governments. A negative law enforcement agreement led to significant issues that have created additional barriers and diverted resources for the Mille Lacs Band.

Federal Update

Sarah Saadian, Vice President of Public Policy at the National Low Income Housing Coalition (NLIHC) gave an optimistic prediction for what to expect in the coming weeks and months from Biden Administration. Sarah emphasized that Biden’s first focus will be too undue damage done to fair housing and civil rights. While one of Biden’s first actions was to extend the eviction moratorium, Sarah mentioned that NLIHC will continue to work with the CDC to improve upon the existing moratoriums shortfalls.

NLIHC also anticipate adjustments to the guidance on $25 billion in emergency rental assistance (ERA) program that passed in December. arah noted that NLIHC sent a letter to U.S. Department of the Treasury Secretary Janet Yellen and U.S. Department of Housing and Urban Development Secretary Designate Marcia Fudge outlining concerns with the Trump Administration's Frequently Asked Questions (FAQ) on the ERA program. ERA allocations are expected to go out to states and local governments this week. NLIHC and other, including MHP, are concerned that the Trump guidelines require burdensome documentation and other barriers that will make it difficult to serve lowest income rents and will slow down the rollout of these funds.

Sarah also noted that things are moving quickly on another COVID relief package. Biden’s proposal would spend another $25 billion on rental assistance, $5 billion on utility assistance, and $5 billion on homelessness assistance. NLIHC will push the administration and Congress to support an additional $28 billion in ongoing vouchers and support an acquisition fund to create more permanent affordable housing as part of the next relief package.

Even more long term, NLIHC is optimistic that the Biden Administration will be able pass funding for universal vouchers, which was included in the Biden campaign platform. Sarah underscored the COVID pandemic makes clear the gaps in safety net programs that need to be fixed so the country is better prepared for future disasters.  Additionally, NLIHC will prioritize major investments infrastructure to build more and preserve homes. A budget process known as Budget Reconciliation would allow the U.S. Senate to pass a budget with a simple majority (51 votes) vs the standard 60 votes.

This analysis of the governor's budget was created by MHP Deputy Policy Director Libby Murphy.

On Tuesday, Jan. 26, Governor Tim Walz released his FY22-23 budget proposal. The proposal includes $100 million in Housing Infrastructure Bonds and $14 million in one-time appropriations.

Proposed One-Time Funding  

 

 

Program

Proposed Base Budget Increase

Households served or homes built FY22-23

Family Homeless Prevention (FHPAP)

$4M

2,000 households

Challenge Program

$4M

60-100 new homes

Homeownership Assistance Fund

$1.5M

175 households

Homework Starts with Home

$1M

185 families

Workforce and Affordable Housing

$1.5M

40-50 households

Manufactured Housing Infrastructure Funding

$1M

 

Homeownership Education, Counseling, and Training (HECAT)

$.5M

2,500 households

Bridges Rental Assistance

$.5M

70 households

Total

$14M

 

 

Proposed Transfers

 

 

Transfer From

Transfer To

Amount

Rental Rehab Deferred Loan

Workforce Housing Development Program

$2M ONE TIME


$100 million Housing Infrastructure Bonds (HIBS)

HIBS are the largest state source of development resources and can be used for a variety of eligible uses, including new construction and preservation of housing that serves some of Minnesota’s lowest income and most under-resourced households.

$4 million Family Homeless Prevention and Assistance Program (FHPAP)

(FHPAP) assists families who are homeless or at imminent risk of homelessness. FHPAP has successfully prevented homelessness, minimized the periods of homelessness, eliminated repeat episodes of homelessness.  Current funding levels only serve about two-thirds of those eligible to receive FHPAP assistance. Last RFP, MH had more than $4M in requests that were not able to be funded.

$4 million Challenge Fund

New housing construction has not kept pace with household growth. In MN today, the statewide rental vacancy rate is between 4%-6% and there is a less than five-month supply of homes for sale. These conditions limit options for families. The development of new housing is critical for economic growth and job creation. The proposal will produce more new workforce housing opportunities.

$1.5 million Homeownership Assistance Fund

A lack of wealth available for entry costs contributes to the homeownership gap between white and Black, Indigenous and People of Color (BIPOC) households. Many households have the income to make monthly mortgage payments but lack the wealth necessary for a down payment or closing costs. The Homeownership Assistance Fund helps moderate-income households become successful homeowners through down payment and closing cost assistance.

$1 million Homework Starts with Home

 On October 1, 2019 there were 9, 060 students experiencing homelessness who were enrolled in Minnesota schools. Homework Starts with Home provides rent and other housing assistance to families with school-aged children that lack housing stability.

$1.5 million Workforce and Affordable Homeownership Program

In addition to structural and institutional barriers, one of the reasons for this racial homeownership gap in Minnesota is due to the lack of affordable homeownership opportunities. Multiple dynamics create a greater need for new affordable opportunities that are within reach for first-time, along with low- and moderate- income buyers. The Workforce and Affordable Homeownership Program provides competitive grants to increase the supply of workforce and affordable homeownership opportunities.

$1 million Manufactured Housing Park Infrastructure Funding

Minnesota Housing has resources to support the preservation and improvements of manufactured home, as well as the purchase of new homes, but lack on-going resources to finance infrastructure improvements of the parks.  This fund provides infrastructure improvements including streets, sewer and water and lighting.

$500,000 Homeownership Education, Counseling and Training (HECAT)

Given the economic impacts of the pandemic, Minnesota Housing anticipates that many homeowners will need foreclosure counseling. Preventing displacement is critical to supporting communities and homeowners.

$500,000 Bridges Rental Assistance

The Bridges program supports people with serious mental illness and allows them to live, work and learn in the most integrated settings in their communities. The proposed funding will reduce the current waiting list.

In addition to new proposed funding, Governor Walz’ budget proposes a one-time transfer of $2 million from the Rental Rehab Development Program to the Workforce Housing Development Program.  Minnesota Housing’s rational for the transfer is that the pace of new housing construction is not keeping pace with household growth, which could impede economic growth and job creation. The Workforce Housing Development Program funds new rental housing options and is available exclusively to smaller to mid-size communities in Greater Minnesota – communities that do not typically receive funding from other new construction programs. The program has no income limits and prioritizes applications with the highest percentage of market rate units. 

After the transfer, the RRDL program will still have $5.5M for the next biennium. Last year with the RRDL program, Minnesota Housing partnered with USDA to rehab 21 projects (544 units).

MHP applauds Governor Walz for these investments in housing. These investments speak to the broad number of challenges impacting families, including housing stability and paths to homeownership. With these investments, Minnesota can expand access and opportunity by producing desperately needed homes, preserve and improve the homes we have, and prevent displacement and homelessness by supporting under-resourced renters.