By Madison McVan, Minnesota Reformer
Last year, lawmakers in the state Legislature passed historic levels of funding — $1 billion — for housing in Minnesota.
They established down payment assistance and forgivable loan programs for first-generation Minnesota homebuyers, hiked a metro sales tax for housing, and passed new renters’ protections, including a law requiring landlords to give tenants a 14-day notice before filing an eviction.
But those efforts are likely to fall far short of fulfilling the need for housing across the state. A 2018 report by the Governor’s Task Force on Housing estimated that Minnesota needed to add 300,000 new homes of all types by 2030 to meet demand and moderate prices.
The National Low Income Housing Coalition estimates the state would need to add more than 100,000 affordable rental units in order alleviate all households overburdened by the cost of housing — those paying more than 30% of their income on rent. More than half of Minnesota households are cost-burdened by rent, and 26% spend over half their income on rent and utilities, a recent Harvard report found.
Nationwide, high interest rates have slowed the rate of new construction for single-family homes and apartment complexes alike. Constructing a house in Minnesota is more expensive than in surrounding states, which developers attribute to stringent building codes.
The Democratic-Farmer-Labor party still has a trifecta: a majority in the House and Senate, plus the governor’s office, but DFL lawmakers likely face some headwinds as they try to ease the housing burden on Minnesotans.
Legislation will face new scrutiny this year, said Rep. Michael Howard, DFL-Richfield, chair of the House housing finance and policy committee.
Last session, lawmakers were working with a big surplus that allowed them to spend liberally on new programs, and provide windfalls to long under-funded areas of government.
Now, Democrats are signaling that the party will take a more restrained approach to spending this session.
“Maybe some things will be a little harder, but at the same time, given our successful track record last year, I’m optimistic we can overcome those challenges and do quite a bit of good work this session too,” Howard said.
DFL lawmakers may find common ground with their Republican colleagues on deregulating the housing industry — for example, loosening building materials requirements that are solely aesthetic and drive up costs.
Here are some housing topics to follow in the 2024 legislative session:
Protections for Section 8 recipients
The administration of Gov. Tim Walz is advocating banning landlords from discriminating against renters who use public assistance, including federal Section 8 vouchers and other state and local programs.
The Minneapolis City Council passed a similar ordinance in 2017, though a legal challenge prevented the city from enforcing the rule until late 2023. The Minnesota Court of Appeals and the Minnesota Supreme Court ruled in favor of the Minneapolis ordinance, signaling that a statewide rule would also likely be upheld against any challenges by landlords.
The Minneapolis ordinance also bans landlords from advertising their apartments as “no Section 8.”
Lt. Gov. Peggy Flanagan has advocated for the proposal in multiple public appearances since the end of the previous legislative session, saying a Section 8 voucher helped her family secure stable housing when she was a child.
“You shouldn’t discriminate against people just because of how they’re paying for their housing,” said Rep. Esther Agbaje, DFL-Minneapolis, the vice chair of the Minnesota House housing finance and policy committee.
Recipients of Section 8 vouchers often sit on a wait list for years, and when they are finally granted the benefit, they have a limited time to find a landlord who will accept the voucher — and must restart the application process if they don’t secure housing in time, said Eric Hauge, executive director of HOME Line, a non-profit that provides legal advice to renters.
Accepting Section 8 vouchers requires landlords to complete additional paperwork and comply with federal housing standards. Participating in the program should remain optional, said state Sen. Eric Lucero, R-Saint Michael, the Republican lead on the Senate Housing and Homelessness Prevention Committee.
Banning parking minimums
Many DFL lawmakers support policies that would encourage denser neighborhoods and the construction of more apartments — a way to quickly add more housing to the state’s supply.
In Minneapolis, the 2040 Plan did just that, loosening zoning rules to allow developers to build bigger apartment buildings in more locations with fewer regulatory hurdles. It also eliminated parking minimums citywide, meaning the City Council couldn’t force developers to set aside real estate for parking or build expensive garages.
The plan worked, encouraging the construction of tens of thousands of housing units in the city and moderating rents, even as prices rose in other parts of the state and country. (Legal proceedings over the plan’s environmental impact suspended the city’s enforcement of the new zoning rules in 2022.)
Sen. Omar Fateh, DFL-Minneapolis, will introduce a bill that would take the Minneapolis 2040 plan’s parking rules statewide. The “People Over Parking Act” would prevent all local governments from imposing parking minimums on developments, lowering costs for builders and freeing up more space for additional housing units.
The proposed legislation would not eliminate any existing parking or prevent developers from building more parking — it only prohibits local governments from enforcing a minimum. For example, requiring two parking spots for every apartment in a building.
Local governments are already pushing back on the proposal, arguing that policies that worked in the metro area are not applicable to greater Minnesota.
Cities already have the option to eliminate parking requirements if they wish to do so, said Bradley Peterson, executive director of the Coalition of Greater Minnesota Cities.
Limiting local zoning authority
Many Minnesota cities — particularly suburbs — have zoning policies that prioritize single-family detached homes and make constructing multi-family buildings difficult and expensive, if not impossible.
A 2021 Star Tribune analysis found that only single-family homes are allowed on at least 73% of residential land in the Twin Cities metro — and that those restrictive zoning rules contribute to racial and socioeconomic segregation.
Fateh’s parking bill is just one example of proposals that would make it easier and cheaper to build different types of housing, including apartment complexes, duplexes and smaller single-family homes in more areas of the state.
“Our top priority in housing this session is to legalize more housing choices for Minnesotans,” Howard said.
In other words, prohibiting local governments from reserving large swaths of land for big, expensive single-family homes. Howard and other housing affordability advocates want to find ways to build more “missing middle” housing — duplexes, triplexes and other small multi-family buildings that allow for more housing density without building large-scale apartment complexes.
“We’re going to try to pursue a suite of changes that will help us unlock what has been a block to a lot of that kind of housing development,” Howard said.
A bill introduced by Rep. Steve Elkins, DFL-Bloomington, in the 2022 legislative session contained many policies hinted at by Howard: barring cities from mandating lot sizes larger than an eighth of an acre; allowing up to two housing units on any lot; blocking cities from mandating minimum home sizes; and prohibiting cities from requiring certain building materials for aesthetic reasons.
The bill failed after strong opposition from local governments.
Expediting emergency rental assistance
The number of people experiencing homelessness in Minnesota ticked up in recent years, according to point-in-time counts conducted by the state’s homelessness service providers.
On the night of Jan. 25, 2023, 8,393 people were experiencing homelessness statewide — 8% more than 2022’s count.
Calls to HOME Line, the free legal help provider, have been flooding in; in 2023, the organization broke its record for the number of calls it received for the third consecutive year.
Evictions have been the number one reason for calls to HOME Line since the pandemic-era eviction moratorium ended in 2022.
Lawmakers last year boosted funding for emergency assistance programs meant to help families in immediate danger of losing housing. The new funds meant providers could help a higher portion of applicants.
“But the need is still crushing,” Howard said.
Instead of creating new programs to help families in crisis that may take years to get off the ground, the state needs to find ways to run the existing programs better, to more quickly process applications and distribute funds, Howard said.
Howard is part of a work group formed last session tasked with finding ways to expedite rental assistance. The group will finalize its recommendations to the Legislature by the end of February.
Housing in the bonding bills
In even-numbered years, the Minnesota Legislature usually tackles public works: big borrowing packages for infrastructure projects.
Since 2012, the Legislature has authorized housing infrastructure bonds, which are issued by Minnesota Housing and used to address housing needs statewide.
The bonds can be used to create supportive housing, preserve affordable rental housing, fix up foreclosed rental properties and support community land trusts — developments that keep single-family homes affordable long-term.
The Legislature may also look at general obligation bonds to fund public housing projects, Howard said. Those require a legislative supermajority, which means they’ll need some Republican support. Greater Minnesota cities could win infrastructure needed for new housing developments.
More renters’ protections
Lawmakers passed a suite of protections for renters in the 2023 legislative session. Landlords must now give renters 14 days’ notice before filing an eviction; include all required fees in the advertised rent; ensure units maintain a temperature of at least 68 degrees during the winter; and provide tenants 24 hours’ notice before entering a unit.
But renters’ advocates believe there is still more work to be done.
Agbaje plans to introduce legislation that would require landlords to provide a reason for ending a tenant’s lease.
The bill would provide a set of reasons why a landlord can evict a tenant or refuse to renew a lease, Agbaje said.
In St. Paul, “just cause notice” has been part of various packages of renter protections that have been passed, repealed, challenged in court, reintroduced and overhauled. Currently, it’s tied to the city’s rent stabilization ordinance; landlords can get an exemption to the 3% yearly cap on rent increases — 8% plus inflation — if they can show that a unit was vacated for good reason.
Those reasons include nonpayment of rent; repeated late payment of rent; ongoing breaches of the lease; damage to the unit that the tenant will not pay to repair; the tenant’s decision not to renew the lease; the owner moving into the unit; renovation or rehabilitation; and more.
Agbaje’s proposed bill is not tied to any rent control measures.
HOME Line, which lobbies on behalf of renters at the state Capitol, said the group will also be advocating for laws that establish renters’ right to organize and a right to counsel in eviction hearings.
In addition to the 14-day notice of eviction filings that HOME Line successfully advocated for last session, they will also be pursuing legislation that would require landlords to give written notice when a tenant has violated their lease, and give the tenant 14 days to resolve the issue.
“What we’re trying to do here is avoid and reduce the number of eviction filings, because as soon as a case is filed, it’s on your record,” Hauge said.
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