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UPDATE: The Senate voted Tuesday afternoon to pass the housing omnibus bill.
The Minnesota House and Senate voted to pass the final version of the housing omnibus bill, which includes $1 billion in housing investments for the next two years.
The House passed it Monday on a 70-61 vote. The Senate passed it Tuesday afternoon on a 34-32 vote. The bill will now go to Governor Tim Walz’s desk to be signed into law.
The bill includes a variety of smaller bills that address housing-related issues that many housing advocates say have persisted and worsened due to the COVID pandemic. Some of the major bills include a metro sales tax, a new state-based voucher program, and more funding to build new homes.
“While we have a billion dollars, which is great, it’s still not enough to meet our housing crisis,” said Representative Esther Agbaje, DFL-Minneapolis. “We are doing what we can to make sure that everybody across the board gets a little bit of funding.”
State Representative Michael Howard, DFL-Richfield, a member of the conference committee, said years of underfunding from the Legislature for housing initiatives is a key reason for Minnesota’s current “stark housing crisis.” He is also the chair of the House’s Housing Policy and Finance committee and chief author of the House’s version of the housing omnibus bill.
Howard said he has worked closely with Senator Lindsey Port, DFL-Burnsville, throughout the legislative session on their separate housing omnibus bills. Port is chair of the Senate’s Housing and Homelessness Prevention committee.
“I’ve been involved in housing negotiations in previous years, and I can tell you that it’s a night and day difference when you have folks that see the need—see the ability for us to make transformational change in people’s lives—and be in problem-solving mode and try to do the most good for the most people,” Howard said.
Here’s an overview of four* key issues in the housing omnibus bill:
Housing production and preservation:
The omnibus bill includes $200 million dollars to fund more housing development for low-and middle-income people. The omnibus bill would also add $90 million dollars to the Naturally Occurring Affordable Housing Fund, which rehabilitates existing homes marketed as affordable with no subsidies.
According to the Minnesota Housing Partnership’s 2021 State of the State’s Housing report, 105,347 more housing units need to be built to fill the gap for extremely low-income households who make 30 percent area median income or below.
Other provisions in the bill would require installing sprinklers in all high-rise residential buildings across Minnesota, and would provide one-time funding for lead testing in rental homes.
State-based voucher program:
The omnibus bill would create a state-based voucher program to allow more low-income people in the metro area to obtain rent vouchers. About 5,000 state-based vouchers would be administered between 2024 and 2027 through local public housing authorities.
Howard and Senator Zaynab Mohamed, DFL-Minneapolis, another member of the conference committee, introduced the voucher bill at the beginning of the legislative session, pushing it as a critical piece of the omnibus bill.
Bring it Home, Minnesota, a group of organizations advocating for rent support, pushed for the voucher program at the Legislature. According to the group: One in four Minnesotans who qualify for a rent voucher receive one. Most renters in the state live in the Twin Cities, and renters of color disproportionately pay more than 30 percent of their income on rent compared to white renters.
“When somebody has a stable home, we know that leads to them having a better outcome in taking care of themselves and going into the workforce and getting education,” said Mohamed.
Metro sales tax:
A metro sales tax in the bill would increase taxes in the seven-county metro area, including Ramsey and Hennepin counties, by a quarter cent to fund state-based vouchers and housing programs run by local governments.
“That ongoing dedicated funding will help us really invest in Minnesotans and make sure that they can afford safe and stable housing,” said Port.
Twenty-five percent of the money raised by the tax will fund state-based vouchers, while 75 percent will help fund local government housing programs.
Expand housing opportunities:
The bill plans to expand opportunities for Minnesotans who face the greatest disparities in owning or renting a home. About three-quarters of white Minnesota households own their homes, compared to about half of households of color, according to the nonprofit data project Minnesota Compass, a research body led by Wilder Research that tracks different Minnesota demographics.
Agbaje is the chief author of a bill that would allocate $200 million dollars to provide down payment assistance and training for first-time homebuyers and homebuyers who lost a home due to foreclosure. The bill aims to reduce racial gaps in homeownership.
Other bills within the omnibus bill include funding to support families at risk of homelessness or eviction, and people dealing with mental illness.
“I’m grateful to both our leadership and to the governor for putting a high priority on housing this year—a priority that’s never, in the history of Minnesota, been put on housing, and that our communities desperately need,” Port said at Monday’s conference committee meeting.
CORRECTION: The headline has been updated.