Committee advances tweak to let state housing tax contributions support market‑rate workforce housing

The House Housing Committee voted to refer House File 1067 to the tax committee after testimony supporting a technical change to Minnesota’s state housing tax credit program that would better align it with the Workforce Housing Development Program.

Vice Chair Dotseth, the bill sponsor, said the change would permit projects in areas eligible for the workforce housing program — which often target market‑rate workforce housing — to also receive contributions from the state housing tax credit contribution fund. The sponsor and supporters described the amendment as a technical fix that would not eliminate the state credit’s affordability tools but would allow pairing when projects meet workforce housing criteria.

Skip Ducheno, president of DW Jones Inc., said his firm has used the workforce housing program in Greater Minnesota to build hundreds of units but that many projects still fall short of financing without additional sources. “By removing income restrictions from the state housing tax credit when paired with workforce housing development dollars, it will allow us to do more and bring employer funding into the mix,” Ducheno said, noting multiple recent projects in smaller Minnesota cities and ongoing unmet demand.

Daniel Lightfoot of the League of Minnesota Cities and Libby Murphy of the Minnesota Housing Partnership described the proposal as a clarifying change that would reduce uncertainty for developers seeking to pair the two programs. Murphy said the tweak responds to developer concerns that securing a contribution could affect priority scoring for the Workforce Housing Development Program absent the statutory fix.

Mark Borseth, senior director of community development and facilities at Digi‑Key Electronics in Thief River Falls, said his community’s vacancy rate is extremely low and that employer contributions to housing projects are a critical tool to enable housing for higher‑paid workers who do not qualify for income‑restricted programs. “The proposed amendment…will provide a real beneficial alignment,” Borseth said.

Committee members including the original bill sponsor and legislators from Greater Minnesota praised the change and discussed the need for more resources to fully meet statewide housing demand. The committee approved referral of House File 1067 to the tax committee by voice vote; no roll‑call vote was recorded in the transcript.