Minn. spending $500 million for affordable housing? How lawmakers want to use the money

ST. PAUL — A group of lawmakers on Wednesday, Feb. 19, supported spending half a billion dollars to provide affordable housing across Minnesota.

A state House committee on Tuesday approved — with bipartisan support and no audible opposition — a bill authorizing the state to borrow a record-shattering $500 million to subsidize a wide range of low-cost housing options.

That’s nearly twice as much money as the $276 million that Gov. Tim Walz requested for housing last month, and he is asking for twice as much housing money as any previous governor.

"It’s an aggressive agenda," House housing committee Chair Alice Hausman, DFL-St. Paul, said as she presented the bill to her committee. Despite the hefty price tag, the panel voted to approve the measure with no "no" votes.

That doesn’t mean the proposal will zip through the Legislature unscathed. It’s likely to be trimmed back as it moves through the budget-making process.

The committee’s approval is a sign that lawmakers are increasingly willing to tackle Minnesota’s severe shortage of affordable housing.

"Without a decent home, people can’t live with the dignity they deserve," Paul Williams, president and CEO of the Project for Pride in Living, a Minneapolis nonprofit, told the committee.

State Rep. Mike Howard, DFL-Richfield, urged committee members to follow the lead of the Minnesota Twins’ "Bomba Squad" that shattered a Major League Baseball record by hitting 307 home runs last season.

"Maybe this committee can be our version of the Bomba Squad," Howard said.

Hausman credited Homes for All, a coalition of 240 mostly non-profit and local government organizations, for assembling and rounding up support for the legislative package. "This organization has done some amazing work," she said.

The bill would authorize the sale of $400 million in "housing infrastructure bonds" to produce homes that working families can afford. Minnesota needs to produce 30,000 new homes a year to keep pace with demand, but it now produces only 20,000, Homes for All said in a statement.

Ten percent of that money would be set aside to provide emergency shelters for homeless people and others with temporary housing needs.

The measure authorizes the state to use up to $20 million a year from its operating budget to pay the debt service on the housing bonds. A simple majority of the House and Senate can pass that type of bonding bill.

Hausman’s proposal also calls for $100 million in general obligation bonds to preserve and improve government-owned public housing that provides homes for vulnerable residents such as seniors, children and people with disabilities. Those bonds require the support of 60 percent of the members of the Legislature. That means they need votes from the Republican minority in the House and DFL minority in the Senate.

In addition, the committee passed separate bills to provide tax credits to spur private investment in affordable housing and $50 million in bonding for construction of short-term homeless shelters.

Hausman’s legislation now goes to the House bonding committee, which is likely to include all or part of the affordable housing initiative in a public construction package that is the Legislature’s top priority this year. Walz has proposed a $2 billion bonding bill, but Republican legislative leaders want to pare that down to around $1 billion.

Senate bonding committee Chairman Dave Senjem, R-Rochester, on Monday introduced a $400 million affordable housing bill in the upper chamber. No hearings have yet been scheduled for that proposal.