Minnesota legislators split over money to prevent eviction 'wave'

Gov. Tim Walz has prohibited housing evictions during the COVID-19 stay-at-home order, but homelessness could surge once the moratorium is lifted and Minnesotans face a backlog of overdue rents.

Legislators in both parties want to prevent mass housing loss by boosting financial aid to help people pay their housing expenses. But they clashed Wednesday over how much help the state can afford to give.

State officials have repeatedly warned that Minnesota's anticipated budget surplus is quickly dwindling as tax revenue drops and pandemic expenses climb. Housing providers, advocates and Democrats say despite those losses the state must act in a big way by putting $100 million or more toward housing assistance — or risk worse economic devastation down the road. Republicans are proposing $30 million, with the possibility of an increase later.

A House committee on Wednesday advanced a DFL bill providing $100 million on a party-line vote; a Senate committee took up a separate GOP bill providing $30 million but took no action.

The House and Senate bills both codify Walz's eviction prohibition into state law but have different dates for when that would end. Differences between the measures need to be ironed out ahead of final votes in the coming weeks.

Walz's temporary moratorium does not reduce what tenants owe landlords, and the administration has called on people to keep paying their rent if they can.

Hair salon owner Nicole Lyons said she makes a living client to client, relying on appointments to pay her bills. She has not earned a cent or been able to qualify for unemployment benefits since her business was forced to close in March. Without her family's financial help, Lyons said she and her three young daughters would be facing eviction from their St. Peter townhouse when Walz's order ends.

She fears for other families that don't have such help, and she believes $30 million would not scratch the surface of the need across the state.

"One day we're working and one day we're not," Lyons said. "If I were to have to move, my kids would have not only have been uprooted from their homes during this … but they have already been kept from their friends and extended family, and they have been sent away from their schools and teachers."

Housing affordability was a crisis before the pandemic and COVID-19 is exacerbating it, said Alan Arthur, CEO of affordable housing developer Aeon.

"Without the kind of support for residents you are considering here today, the wave of economic eviction will be massive," Arthur told House members during a hearing Wednesday. He predicted the number of Minnesotans who are homeless will double, but he said without state aid that number could triple or worse.

The Minnesota Housing Finance Agency would distribute the aid through an existing Family Homelessness Prevention and Assistance Program, under both the DFL and GOP bills. Walz previously proposed putting an additional $10 million into that assistance program. Rep. Alice Hausman, DFL-St. Paul, said the governor now supports $100 million.

Both bills allow for the subsidies to be used for rent, mortgages, homeowner association dues, homeowner insurance, contract-for-deed payments, mobile home park lot rent, property taxes or utilities. Recipients could spend the money on bills due March 1 or later. A household would qualify for assistance if they are unable to pay due to COVID-19 and make less than 300% of federal poverty guidelines, or $78,600 for a family of four.

The legislation would stabilize families and help landlords pay their bills, said Walz's Minnesota Housing Commissioner Jennifer Ho. She also made the pitch to legislators Wednesday for additional state borrowing for housing projects. "Housing investments are stimulus to get the economy back as quickly as we can, once it's safe to do so," she said.

Rep. Brian Johnson, R-Cambridge, is one of the lawmakers concerned about a $100 million investment. He believes the state's pre-coronavirus projection of a $1.5 billion budget surplus will fall to zero and the nearly $2.4 billion in reserves could be spent.

"I don't know where we're going to find $100 million. Even $30 million is going to be a tough stretch," he said.

Hausman, the housing committee chairwoman, said she is less pessimistic than her GOP counterparts about the state's economic forecast.

"I'm fairly confident we can eke out $100 million," she said.

Jessie Van Berkel • 651-925-5044