Minnesota steps up affordable housing investments

Minnesota's affordable housing crisis is getting a $259 million infusion of state and federal dollars to bolster housing options for some of the state's most vulnerable populations.

Politicians from both parties and local, state and federal governments are eager to show they're responding as Minnesotans decry the overall housing shortage, rising rents, lost dreams of homeownership, and lack of supportive housing for people who are veterans, chronically homeless, disabled or mentally ill.

On Thursday, Gov. Tim Walz and the Minnesota Housing Finance Agency, as well as the U.S. Department of Housing and Urban Development, made separate funding announcements in Minneapolis.

Walz and the housing agency announced $254 million to subsidize home mortgages, senior housing, workforce housing, supportive housing for homeless people and building and preserving single-family homes. Meanwhile, HUD officials announced $5.3 million in rent vouchers for disabled Minnesotans.

Also Thursday, U.S. Rep. Ilhan Omar, D-Minneapolis, announced legislation that would invest $1 trillion in affordable housing projects over a decade, with a goal of creating 12 million new units in that time. The legislation would also create permanent federal funding to help make housing more affordable, she said, but does not specify a source of funds.

In a packed room Thursday at the Sabathani Community Center in south Minneapolis, Walz said that "this is the beginning" of the state's efforts to continue funding housing opportunities and that leaders are eager to continue partnering with organizations to help more people. Sabathani is receiving funding for an apartment building that will house 48 seniors. Overall, the funding will create or preserve 2,665 homes, including rental units and single-family houses.

"Minnesotans cannot settle for almost getting there, we can't settle for once-a-year announcements if we're going to do this, we can't settle for anything less than making sure that every single Minnesotan has a safe place to call home," Walz said.

Everyone wants housing that is affordable, but renter incomes are lower than the housing prices available, said Minnesota Housing Finance Agency Commissioner Jennifer Leimaile Ho. She said a key reason the state was able to make this new investment is the Legislature's approval of $60 million in infrastructure bonds for affordable housing projects. That number is half of what Walz initially asked for.

Ho noted to the governor that "had [the Legislature] done what you asked, it would've been the biggest" funding announcement for affordable housing in the state's history. That's why she said the state still has work to do.

"As the state, our job is to make housing affordable for people who make the least," Ho said. "It's more than just bricks and mortar. These proposals represent an investment in people."

Minneapolis Mayor Jacob Frey said during the event that "this really is a day that is a dream come true for a mayor" and that it's "real dollars, real units and real roofs over people's heads." The funding will help create a combination of 600 units of housing that are affordable, culturally specific or help seniors.

"No local government can address the affordable housing crisis on its own," Frey said. "And our city's collective resolve to combat our affordable housing crisis will only be as effective as our partnerships are strong."

Marissa Evans • 612-673-4280