The 2023 Legislative Session in Review!

In December of 2021, MHP convened partners and invited them to join us in asking the Minnesota Legislature to invest $2B in 2022. Gridlock had us come back in 2023, again asking for $2B. On Jan 11, 2023, MHP and our partners held a rally in the Capitol Rotunda. The crowd in the rotunda chanted "$2B in 2023!" Now that lawmakers have passed all the budget bills, it is clear that lawmakers heard that rallying call and delivered.

Housing Omnibus Bill: $1B additional one-time, $50M additional on-going, and a nearly $400M/year in 7-county metro

One of the biggest highlights of this session is the $1B in additional direct appropriations to Minnesota Housing. Minnesota Housing’s FY24-25 budget is 850% greater than its current base budget. The Housing Omnibus bill makes critical investments throughout the housing continuum. This biennium, Minnesota Housing will have over $600M in direct state appropriations to produce and preserve more single-family homes, manufactured home parks/cooperatives, and multifamily rental homes. Minnesota Housing will have more than $450M in resources to increase access and provide choice and opportunity for one’s housing through rental assistance, homebuyer counseling and financial assistance. 

Additionally, the Housing Omnibus bill includes a seven-county metro wide sales tax. The tax will raise nearly $200M per year in coming years. These resources will be distributed among metro based public housing authorities and city and county governments. 25 percent of the funds will fund rental assistance, 25 percent of funds will go directly to cities, and 50 percent of the funds will go to counties. Cities and Counties can use these resources for emergency rental assistance, to support nonprofit housing developers, and build and preserve more affordable homes. Download the final spreadsheet for the Housing Omnibus Bill here.

Taxes

Housing was a top priority for the tax committees, as lawmakers provided property tax relief to homeowners and renters. Lawmakers significantly expanded the Renter’s Credit and made it easier for renters to claim their credit. As a result of the bill, an estimated 119,000 more Minnesotans will receive the credit.  The bill also increases the property tax refund for homeowners. Lawmakers provided a one-time boost to both the renter and homeowner property tax refunds.  Another significant change was to the 4d tax classification will result in over $60M in property tax savings for participating units. 

Owners of multifamily rental homes will see their property taxes assessed at a single .25 rate. The tax bill also includes an additional $40M for the workforce and affordable homeownership program, establishes a local county housing aid program and funds it at $45M this biennium, and creates a credit to incentivize manufactured home park owners to sell to existing residents. In addition to housing-specific line items in the bill, the bill funds the Minnesota Child Tax Credit. It’s not clear yet how many families will receive the credit, but it will drastically reduce child poverty in Minnesota. And, Tribal nations will get aid, which can be used for housing.  

Bonding: Nearly $76M in housing and $21M in shelter

In the final hours of session, the Legislature passed two bonding bills. A cash bill invests $850.7M and the other invests $1.3B from the proceeds of general obligation bonds, $219.2M from the Transportation Fund, and $224.9 from the General Fund. The bills invest $30M in cash and $41.87M in general obligation bonds for public housing rehabilitation. The bill also includes $3M for a Greater MN Housing Program and $1M to the City of Minneapolis for Satori Village. There is over $21M in funding to five specific emergency shelters.  

Health & Human Services: Nearly $200M

The Health and Human Services bill includes $100M in one-time funding in shelter capital, a $30M increase in FY24-25 and $55M in FY26-27 in the Emergency Shelter Program, $6M this biennium and next for transitional housing, $30M FY24-25 and FY26027 in Homeless Youth Act, $4.25M in FY24-25 and $2.5M in FY26-27 in Safe Harbor, and $850K inFY24-25 and $1.55M inFY26-27 for the Homeless Management Information System. Hennepin and Ramsey Counties will each receive $11.4M in one-time funding to provide services to people experiencing homelessness. The bill includes modifications to the Housing Support Program to allow individuals with unearned income to keep more money.  

Environment and Climate:

The Environment and Climate Omnibus invests $39M for pre-weatherization and weatherization activities and  funds a number of programs to help homeowners afford things like heat pumps and electric panels. The bill establishes the Minnesota Climate Innovation Authority/Green Bank. The Green Bank can fund housing related activities that incorporate clean energy technologies.  The bill changes the building code process to help Minnesota achieve an eighty percent improvement in annual net energy consumption by 2036. Several of the state’s investments will help leverage new Federal funding from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) 

MHP will continue to dig into these bills and more to uncover the full scale of 2023 investments and policy changes. Stay tuned for more detailed session summaries.

The Bill for a Constitutional Amendment for Housing Has Been Introduced

The Our Future Starts at Home bill has dropped! In the final days of session bill for a Constitutional Amendment for housing was introduced by Chief Authors Rep. Mike Howard (HF3329) and Sen. Zaynab Mohamed (SF3357). A full list of authors also includes Senators Port, Bolden, Gustafson, and Kupec (the maximum number of senators), and Representatives Agbaje, Bahner, Bierman, Brand, Cha, Finke, Frazier, Greenman, Hassan, Her, Hollins, Hussein, Jordan, Keeler, Kozlowski, Lee, Reyer, and Sencer-Mura.

ourhomesmn.org

The Affordable Housing Credit Improvement Act Introduced

View the Action Campaign's full fact sheet here.

On May 11, the Affordable Housing Credit Improvement Act (AHCIA) of 2023 was introduced (S. 1557/H.R. 3238). MHP has been a long-time supporter of the legislation and member of the ACTION campaign that promotes the Low-Income Housing Tax Credit. This bipartisan legislation strengthens and expands the Low-Income Housing Tax Credit (Housing Credit), including provisions that improve how the Housing Credit works in rural and other underserved communities.

As of May 18, Minnesota co-sponsors of the AHCIA include Rep. Angie Craig (D), Rep Tom Emmer (R), Rep. Brad Finstad (R), Rep. Betty McCollum (D), Rep. Dean Phillips (D), and Rep. Pete Stauber (R). In prior years, Minnesota’s entire federal delegation has co-sponsored the AHCIA; our goal with your help will be to include every Minnesota Member of Congress as a co-sponsor in the 118th Congress 

Strategy and Investment in Rural Housing Preservation Act Re-Introduced

The Strategy and Investment in Rural Housing Preservation Act, S.1490, authored by Senator Tina Smith (D-MN) and Senator Jeanne Shaheen (D-NH) was re-introduced on May 10, 2023 to help preserve USDA multifamily and farmworker housing. MHP and Minnesota rural residents and housing developers were highly engaged in this bill, including meeting with Senator Smith’s staff on multiple occasions to share rural communities' perspectives on the need to preserve deeply affordable rural rental homes. The bill would support USDA’s Rural Housing Service and its housing programs with better options for maintaining rental assistance and preserving rural rental homes.

Minnesota is one of the top states in the nation with Section 515 rural rental homes, and many of these homes are maturing out of the 515 program, which will remove affordability requirements and other supports for low income rural residents. The legislation helps incentivize property owners to stay in the program and – when loan restructuring is not available – allows USDA Section 521 rental assistance to be decoupled from the underlying USDA mortgage so that some affordability can be maintained for residents. 

House Appropriation Committee Cuts Funding for Rural Homes 

House Appropriations held a markup of a FY24 bill that included important USDA rural housing programs; the bill included both cuts to housing programs and clawbacks of some previously appropriated funds. Two examples of critical programs cut include: 

• $900 million for the Section 502 Single Family Housing Guaranteed Loan Program, $350 million below FY23 enacted levels. This includes $5 million for the Native Relending Pilot Program, $2.5 million less than FY23 enacted.
• $60 million for the Section 515 Rural Rental Housing Program, $10 million below FY23 enacted levels

Register NOW!

MHP is excited to host this regional workshop bringing together leaders focused on housing solutions for the region and emphasize specific development opportunities in the region.

A New Paper Explores The 4% Low-Income Housing Tax Credit Program

A recent release titled "A Missed Opportunity? The 4% Low-Income Housing Tax Credit Program" reveals that states have not actively influenced the locational outcomes of 4% projects credit until recently. Policy levers have a more substantial impact on the outcomes of the 9% program. However, the results indicate that increased competition and strong policy levers have enabled some states to influence the siting outcomes of 4% projects.

Analysis from Moody's Analytics Outlines 8% Loss of Affordable Housing

Finding and maintaining affordable rental housing remains a challenge, especially for the nation’s lowest income renters who already struggle with basic necessities. This analysis outlines a combination of factors that during the pandemic, including affordable units being converted to market rate, that resulted in an 8% decline, or loss of over 500,000 affordable units for the extremely low-income renters.

Minnesota Regional Housing Forums  

Minnesota Housing is partnering with Greater Minnesota Housing Fund to offer three virtual housing forums for the Southwest, Northeast and Northwest regions. The events will feature panel discussions on housing development in the region, along with interactive breakout sessions on housing solutions, legislative and policy updates, funding updates, and networking opportunities. 

Event Dates 

• Southwest Minnesota Regional Housing Forum - May 31, 2023 – 9 a.m. to Noon
• Northwest Minnesota Regional Housing Forum - June 1, 2023 – 9 a.m. to Noon
• Northeast Minnesota Regional Housing Forum - June 12, 2023 – 9 a.m. to Noon 

MHP Seeks a Summer Research Intern!

The summer intern will support the work of the Research Manager on a select project, performing tasks that may include: data analysis, policy analysis, performing interviews, and contributing to written reports. The summer intern will participate in team meetings that include research and policy staff and partners to MHP. 

Join the MHP Team as a Narrative Change VISTA Tenant Organizer!

MHP is seeking a Narrative Change VISTA Tenant Organizer to build tenant power and influence through storytelling, organizing, convening, and leadership development activities. Join us to develop housing narratives directed by the intentions and leadership of tenants. This position will facilitate and support virtual and in-person dialogues about housing challenges, the Minnesota housing system, and housing solutions and successes.

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