Housing and services bills have been moving rapidly through the House and Senate, as both bodies position themselves for end-of-session negotiations. It may come as no surprise that the House, Senate, and Governor’s versions of the budget differ from each other when it comes to Minnesota Housing funding and homelessness services. A side-by-side budget comparison table and analysis follow with special focus on the $39 million increase sought in the Homes for All agenda for 2016-17 and on programs for housing for workers. It’s an important time to reach out to legislators, as negotiations will be underway in the coming weeks.

Minnesota Housing funding: Homes for All-related

Looking collectively at the House, Senate and Governor’s proposals for programs on the Homes for All agenda for Minnesota Housing, the House proposal looks most like an outlier, with millions in cuts proposed. The other two budgets offer increases. The House and Senate bills both passed off of the floors of their respective chambers on April 22 and will head to conference committee. Conferees are likely to be announced this week.

Here’s how the Minnesota Housing proposals stack up in comparison to Homes for All, which seeks a $19.5 million increase to key programs:

The current House proposal (H.F. 843) cuts $8.7 million to Homes for All Minnesota Housing programs. The Challenge program takes the biggest hit, with $5 million diverted to DEED for a workforce housing program (see Other Housing below). The Housing Trust Fund and Family Homelessness Assistance Program also are reduced. The proposal, including controversial policy changes to the Challenge Fund, is discussed in detail in our April 13 blog post.*

The Senate proposal (S.F. 2101) by contrast, offers a $16.2 million increase in funds for the Homes for All program priorities. Each of the six programs gets a boost, though not at the levels recommended by Homes for All. The biggest winner is the Challenge Fund, which sees a $1 million increase in regular funding, plus a one-time increase of $8 million for the Housing and Job Growth Initiative. (The one-time funding would support housing in communities with a shortage of housing for workers. This issue has been heard at the legislature as a need in Greater Minnesota this session.) Bridges, which serves people with serious mental illness who face homelessness, also comes out ahead of the original Homes for All recommendation, with a $2.5 million increase. Other programs with funding increases in the Senate bill, but at lower levels than Homes for All recommends, include the Family Homeless Prevention Assistance Program (FHPAP), the Housing Trust Fund, Single Family Rehab, and Capacity Building grants.

The Governor’s proposal, proposes total increases of $15.6 million to Homes for All programs, just slightly less in sum than the Senate proposal. However, the distribution of dollars across programs differs. Challenge again receives the largest increase ($10 million) via a one-time increase solely for the Housing and Job Growth initiative. Several programs are funded at the same level as last year, and several see small increases.

Also, the non-Homes for All “HOME” bill to fight disparities in home ownership rates receives $500,000 in the Senate proposal, where it is rolled into the Capacity Building grants. (The House does not appropriate any resources for the HOME bill, but does urge Minnesota Housing to deploy resources and make “continuous improvements” to reduce disparities.

See the side-by-side table for detailed budget breakouts.

Other housing for workers

As discussed above, the Housing and Job Growth initiative in the Challenge Fund is a key program for housing for workers. Challenge serves renter households earning up to $62,000 and owner households up to $89,000. MHP is also following several additional proposals not included in the Homes for All ask:

• In the House and Senate bills, $5 million and $4 million respectively are budgeted for a program to be housed in the Department of Employment and Economic Development (DEED) (as opposed to Minnesota Housing) for market-rate rental housing development for workers in Greater Minnesota. This program would build housing without any income limits attached. In fact, pairing these dollars with any funding source that carries income restrictions for residents is prohibited in these proposals. In the House, the $5 million proposal comes at the expense of the Challenge fund.

• Both the House and Senate (but not the Governor) allocate $1.4 million, for 2016 only, to continue a workforce housing pilot program in DEED from the current budget cycle for creating housing in Roseau and Pennington counties. (This program has seen mixed results, with some dollars yet to be utilized.)

While MHP recognizes the need for housing in Greater Minnesota, even for workers at moderate-income levels, we have serious concerns about several elements of the DEED program proposed. Key concerns include the inability to utilize income-restricted funding sources to piece together funding, as well as locating such a large housing program in DEED, which has much less expertise in financing rental development than the Minnesota Housing Finance Agency.

The legislature is also looking at tax policy changes related to housing for workers, to be covered in a future post.

Services funding

For services through the Department of Human Services for people facing homelessness, Homes for All has proposed an increase of $19.5 million across five programs. The three budgets (House, Senate, and Governor) offer far lower increases, totaling $7 million, $9 million, and $6.5 million respectively. The Homeless Youth Act and the Bridges program for adults with serious and persistent mental illness both see increases in all three proposals. Transitional housing sees no increase in any budget, and the Senate kicks in more than the other two proposals for long-term homeless support services and emergency services. You can find details in the side-by-side budget comparison.

The Senate HHS bill passed off the floor last week, and the House bill is to be voted on today (4/28).

How to support

Please contact your legislator in support of $39 million for Homes for All  and $10 million for the Housing and Job Growth Initiative. Please ask them to share your interest with conference committee members, who will be named soon.

*Note: our April 13 Capitol Connect blog post originally reported that the House bill removes income limits from the Challenge Program, and disallows pairing Challenge funds with other income-restricted sources. However, these two changes apply only to the half of Challenge funds carved out for workforce housing in Greater Minnesota for 2016-17.