Bonding bill finally passes; what does it mean for housing?
Libby Murphy, MHP’s Deputy Policy Director, provides an update about the bonding bill and what it means for housing going forward.
On October 14, the Minnesota Legislature passed a $1.87 billion bonding and tax bill with overwhelming bipartisan support. Thanks to the persistence of advocates, lawmakers were forced to overcome partisan differences and finally pass a bonding bill in their fifth special session after failing to reach agreement in regular session or in the four previous special sessions.
A bonding bill requires a supermajority of lawmakers in each chamber to pass. The DFL controlled House only needed six votes. The House’s first attempt to pass a bonding bill at the end of regular session n May gained no Republican support and failed on a 75-58 vote. Last week, 25 GOP members voted in favor of the bill, securing a 100-34 vote. It passed in the Senate by a 64-3 vote.
This bonding bill includes hundreds of infrastructure improvement projects around the state, including $100 million in Housing Infrastructure Bonds (HIBS) and $16 million in General Obligation (GO) bonds for housing. HIBS will help to create and preserve roughly 500-1000 homes. The GO bonds will help maintain existing public housing units.
Calculating the impact of the bonding investment in housing is challenging because HIBs can be used for a number of eligible uses, including new supportive housing, preservation of existing federally subsidized housing, manufactured housing, and land for land trust homes. Lawmakers, hoping to do more to address persistent homeownership gaps, expanded eligible uses of HIB to build single-family homes. The Homes for All coalition’s request to add “deeper affordability” to build units for households at or below 50% of AMI without supportive services did not make it into the final package.
The bill also included some tax relief for small businesses and farmers. A regular session Senate tax bill had included 4d tax relief for affordable housing while the original House tax bill included a provision to capture $4 million annually of the mortgage registry and deed taxes to fund the Workforce Homeownership and Affordable Housing Program. This capture was included in some special session House and Senate proposals but lawmakers, ultimately, excluded the provision from the final bill.
For the first time, the bonding bill included several “Equity Appropriations” that allocate money for communities that have been left out of the funding process in the past. There are also provisions aimed at ensuring local governments follow the state’s workforce participation goals and equal-pay protections for communities of color and women.
The bonding bill also includes $4.5 million in bonds for a Perspective Family Center in St. Louis Park. These funds can be used for a variety of purposes to support the welfare of homeless children, including supportive housing.
While it could be months before the infrastructure projects financed by the new bonds will get underway, passage of this bonding bill is a relief to housing advocates. More projects that applied to Minnesota Housing for funding in July and who applied in hopes of new and robust state investments will be able to move forward as a result of this bill.
Check out Session Daily for a summary of what is in the bill.