With a divided legislature, Minnesotans anticipated a messy end to the 2019 session. Early on, pundits predicted gridlock. While we avoided a government shutdown, the end was messy, indeed. In a move that has almost become normal, Minnesota’s legislators finalized the State’s budget in a not-so-special, special session.

Partisan posturing caused much of the conflict between the Republican-controlled Senate and the DFL-controlled House. The need to invest in affordable housing, however, was practically undisputed. In the end, advocates worked with legislators and the Walz administration to secure $78 million in new investments for emergency shelter, rental assistance, and preservation and new production.

Photo: From left: MHP Deputy Policy Director Libby Murphy, Housing champion Rep. Alice Hausman (DFL-66A), Pam Johnson of Twin Cities Habitat, and Kari Johnson of Metropolitan Consortium of Community Developers pose with baby Frances in support of #Homes4AllMN in the final days of session.

The first bill to pass in special session was the bill to appropriate Minnesota Housing Finance Agency’s (MHFA) budget, which passed off the House and Senate (66-0) floors with overwhelming majorities. That bill increases MHFA’s budget by 12 percent this year and 9 percent in the following budget cycles – a huge increase compared to the 2017 budget cycle, which saw an increase of 0.04 percent. In the very last minutes of session, a standalone bill to allocate $60 million in Housing Infrastructure Bonds (HIB) passed 51-15 in the Senate and 103-23 in the House.

Below is a summary of some items that passed and some that did not:

Passed

• $60 million in Housing Infrastructure Bonds to build and preserve affordable housing.
• $5 million increase in one-time funding to the Economic Development & Housing Challenge Program, a key funding source to develop affordable multifamily and single-family homes.
• $10 million/biennium increase in ongoing funding to MHFA
  • $3.5 million/ biennium Homework Starts With Home
  • $3.5 million/biennium increase to Family Homeless Prevention and Assistance Program (FHPAP)
  • $2 million/biennium to Manufactured Home Grants
  • $500,000/biennium to Workforce Homeownership Program
  • $500,000/biennium increase to Bridges
• $3 million one-time funding to Emergency Services Program (Department of Health & Human Services)

Did not pass

• General Obligation (GO) Bonds. GO Bonds finance the rehabilitation of publicly-owned housing.
• Local Housing Trust Fund state match. While the match was included in the Governor’s budget, other programs were ultimately prioritized in the final budget.
• Housing initiatives in the tax bill, including the affordable #HousingTaxCredit. Between efforts to conform to federal tax changes and disputes over increasing the gas tax and repealing the sunset on the provider tax, there wasn’t enough to fund a new investment in housing.

These investments are significant – and historic. They demonstrate a growing recognition that housing is a key issue impacting Minnesota’s present and future in a range of areas – from education and health outcomes, to economic growth and caring for our rapidly aging population. That recognition has been hard-won. The Homes for All coalition and other advocates have worked together with housing champions at the legislature for years to raise awareness that housing investments impact everything. From rallies, action alerts and social media blitzes, to securing a Governor’s Task Force on Housing, advocates have worked hard to draw attention to the issue. More recently, through efforts like Prosperity’s Front Door, leaders from the business community have bolstered that effort.

Nevertheless, this was supposed to be the “year of housing.” On the tails of the Housing Task Force, Governor Walz proposed a 25 percent increase to MHFA’s budget this year and 15 percent in the following budget cycles, plus $150 million in bonds. Housing advocates have much to celebrate, and the outcomes of the 2019 session give us hope that our messages are gaining traction. And it is clear housing has a champion in Governor Walz and other leaders at the Capitol. However, in the face of Minnesota’s deep need for affordable housing, we’re also aware that there’s work left to be done. After a brief rest, we’ll get back to work, and with your help, we’ll continue to call for the housing investments Minnesota needs for strong communities and a strong state.

Stay tuned to MHP’s blog for future updates!