Homes for All - 2021 End of Session Budget and Policy Recap

By: Kari Johnson, Zack Eichten and Michael Dahl

Homes for All Policy Co-Chairs

The Homes for All coalition formed 10 years ago with a goal of bringing collective statewide advocacy to the Minnesota Capitol. Since then, Homes for All has grown to 270+ organizations reaching every corner of the state representing nonprofits, direct service providers, faith communities, the private sector, local municipalities, and philanthropic organizations - all working in unison to amplify statewide affordable housing needs at the Capitol. Throughout the past decade, the Homes for All coalition has had major successes including over $500 million in bonding investments, increased appropriations to existing and new programs, policy changes that better meet the needs of communities across our state, and Homes for All statewide advocacy has brought increased attention to the affordable housing needs across the continuum.

Throughout the 2021 regular and special session, Homes for All advocates were able to weigh-in on budget and policy priorities. Advocates met with lawmakers over zoom, testified in multiple hearings, held two online rallies filled with impactful stories and sent letters and hundreds of emails.

Your advocacy paid-off and we are celebrating big wins this year, which coincides with our 10th anniversary! Below are the coalition’s priorities areas for our 2021 legislative agenda and what we were able to accomplish.

1. Protecting Rights and Advancing Equity

• Shelter Provider Task Force: Emergency shelter saves lives, but our shelter system is not working for everyone. Inspired by the Shelter Residents Bill of Rights, the Task Force on Shelter will bring together key stakeholders, including former shelter guests and rural shelter providers, to develop recommendations that will strengthen Minnesota’s emergency shelter system and ensure that everyone has a safe and dignified place to stay while they seek permanent housing. $200,000 in funding for this task force was included in the Omnibus Housing Finance and Policy Bill. The Homes for All Coalition looks forward to returning next session with the recommendations from the Shelter Task Force to implement changes.

• COVID-19 Eviction Moratorium Off-Ramp: Homes for All advocates have been especially concerned with the potential for a wave of evictions as the pandemic winds down. The eviction moratorium phaseout is a solid compromise and Homes for All wants to acknowledge that the policies in the bill will serve Minnesota renters better than if Executive Order 20-79 and/or the peacetime emergency were to end abruptly without any guardrails. Here are some key details:

  • When does the phaseout start? 

    • The Eviction Moratorium Phaseout began on June 30th.

  • What must the 15 day notice include?

    • The notice must be in writing and given to the tenant at least 15 days prior to the landlord filing the eviction action for non-payment of rent. It must include a statement that the state eviction moratorium has ended and that the tenant may soon be subject to an eviction action. It must state the total amount of past due rent, and include a statement that the tenant may be eligible for financial assistance through RentHelpMN.org or by calling 2-1-1.

  • What if I have a pending rental assistance application?

    • A pending rental assistance application can protect tenants from eviction for nonpayment of rent while they are waiting for their application to be processed and the money paid out. This protection lasts until June 1, 2022, but only for those tenants who have pending applications, so applying for this assistance is an essential first step.

  • What is the timeline and where do I find more information?

    • Check out this blog post by Homes for All member and partner HOME Line: https://homelinemn.org/phaseout/

    • HOME Line also runs a free tenant hotline for all of Minnesota, call: 612-728-5767 or Toll-free from Greater Minnesota: 866-866-3546.

2. Providing Shelter and Support

• Emergency Services Program: The Omnibus Health and Human Services Bill will fund the Emergency Services Program at $12 million/biennium, on an ongoing basis. As a reminder, the current base budget for this program is a mere $844,000/year. This money will be able to be used for shelter operations, including transportation, child care, mental and behavioral health care, and much more. This is a massive victory for getting people into stable housing quickly. 

• Housing Support Program: Two important accomplishments are included in the Omnibus Health and Human Services Bill: a waiver in the absence policy for people seeking medical treatment and an increase to the base rate. The base rate for Housing Support will increase by $50/month, beginning in July of 2022. In addition, there is agreement on extending the absence waiver, so people seeking medical treatment don’t need to choose between housing and healthcare. Both of these victories are critical for ensuring greater housing stability in the Housing Supports program. 

• Shelter Capital: The Omnibus Health and Human Services Bill provides $1 million/year for the next four years in Shelter Capital dollars. It is currently unclear if the funding will extend past the four years but these resources will provide critical funding to preserve shelter infrastructure across the State. These funds will make it possible for shelters to make essential investments that promote health, safety and accessibility. 

3. Creating and Preserving More Homes

• Housing Infrastructure Bonds (HIBs): The consistent investments through HIBs in recent years continues to make a significant impact on Minnesota’s affordable housing market. The Omnibus Housing Finance and Policy Bill includes $100 million in HIBs. The coalition advocated up to the last minute for the deeper affordability new eligible use without supportive services and the inclusion of Naturally Occurring Affordable Housing (NOAH) preservation as a new use as well. These two types of affordable housing are extremely difficult to finance and we were hoping to finally see investments made in those areas through appropriations or HIBs during the 2021 legislative session. 

• 4d Tax Classification “Reset” and 2 Year “Freeze”: The Omnibus Taxes Bill included a reset of the 4d first tier rate back to the 2014 number of $100,000 and will be held at that rate for tax years 2022 and 2023. The bill also includes language mandating a study due by January 2022 on the best path forward regarding 4d properties and the tax classification rate. Since 2014, the second-tier rate reduction “kick-in” has risen from $100,000 to $174,000 (or 74 percent). In 2014, no one imagined the dramatic increase in property tax valuations that have occurred. The rising valuations means the value of the second tier has provided less and less benefit, putting more and more stress on affordable housing providers to increase rents. 

• Affordable Housing Tax Credit: The Omnibus Taxes Bill also established the Affordable Housing Tax Credit at $10 million annually for the next 6 years, making this the largest new and ongoing investment to support affordable housing development and preservation since 2013. This new program not only creates more predictable funding, but also provides an opportunity to incentivize broader public participation in achieving the affordable housing needs in communities across Minnesota. This program is flexible to meet the needs of individual communities and can be used as a stand-alone program or paired with other existing financing tools. The tax credit supports deeper affordability with 35% of funds reserved for households at or below 50% AMI and it includes set asides for communities with populations smaller than 2,500 and single-family housing.  Homes for All is excited to see this program in action in the coming years. 

4. Advancing Ownership and Wealth-Building

• Workforce Homeownership Investments: The Omnibus Housing Finance and Policy Bill included a significant increase in investments to support homeownership development and preservation. This critical funding will help increase the supply of homes available to lower income, but income ready, households. It is no secret that Minnesota’s racial homeownership disparity is embarrassingly high. State resources are one of the main ways to make progress towards helping BIPOC households realize homeownership opportunities, and it makes sense then to invest more in the programs that can make a difference. Additionally, a portion of the  $100 million in HIBs is allocated to support Single Family Homeownership ($18.33 million) and Manufactured Home Park Acquisition and Infrastructure ($15 million). 

Other Investments: While not explicitly on Homes for All’s agenda this year, investments in the Challenge Program, Local Housing Trust Fund Match and Manufactured Housing Infrastructure are all programs we have supported in recent years and received funding increases through the Omnibus Housing Finance and Policy Bill. The Omnibus Taxes Bill also included a new notable housing investment this year (two mentioned above) and also a program providing aid to counties with a Homeless Youth Prevention Credit at $40 million per biennium, which is the largest new investment in housing in over a decade . See the projected county by county aid here.

We are thankful for all of these investments and policy changes -- we are confident that they will make a meaningful impact in communities across Minnesota. Thank you to all the advocates for continuing to show up and the important work you do every day!