The Minnesota House of Representatives is considering a bill that would dedicate millions to tackling the affordable housing crisis.
HF 743 aims to drive down the price of homes by increasing the supply through a combination of policy changes and by infusing new and existing grant programs with hundreds of millions of dollars. It would also require property owners to provide relocation assistance to tenants in affordable housing units when switching those units to market rate.
“We know we are in a housing affordability crisis,” said House Rep. Matt Norris (DFL). “This bill aims to incentivize the conditions that create affordability throughout our state.”
The bill also expands eligibility and provides $400 million for housing infrastructure bonds, which are tax-exempt bonds used to finance construction for permanent housing for families or individuals experiencing homelessness, housing for seniors ages 55 and up, and the preservation of federally-assisted rental housing.
It also provides $50 million to pre-existing public housing owners to buy and maintain homes, and permits Minnesota Management and Budget to sell up to $100 million in bonds for public housing rehabilitation, which includes updating, repairing, modernizing and removing health and safety hazards from dwellings.
With the passage of HF 743, a real estate excise tax would be implemented “to discourage large corporations from buying large numbers of single-family homes,” said Rep. Norris, who is the sponsor of the bill. The tax is only imposed if the buyer of the home is a corporate entity.
“When you’ve been to one city in this state, you’ve been to one city, and all of them have different housing needs,” Daniel Lightfoot with the League of Minnesota Cities said. ”And we view this bill, along with the policies and resources provided, as a great path to help local units of government address their locally identified housing needs.”
The bill was referred to the House Tax Committee, where Rep. Norris said that they will iron out the portion of the bill regarding the excise tax after concerns about the tax, and where that tax revenue is going, were raised by Rep. Brian Johnson (GOP).
“All that is doing, taking the taxpayer dollars that were paid to the state of Minnesota, is taking that money and giving it to somebody else,” said Rep. Johnson. “Public housing is important, but the cost of that housing needs to be built into the price of the rent, and not be subsidized by taxpayer dollars at the other end.”