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Minnesota Housing gives progress report on housing infrastructure bonds as committee hears housing bills
Summary
Minnesota Housing Commissioner Jennifer Ho told the Capital Investment Committee that housing infrastructure bonds (HIBs) have funded nearly 10,000 housing units since 2012 and leveraged roughly $1.8 billion in total development costs, while demand continues to far outstrip funding.
Minnesota Housing Commissioner Jennifer Ho told the House Capital Investment Committee on March 25 that housing infrastructure bonds have been the largest state capital source for affordable housing development and preservation in Minnesota and have a strong leverage effect with federal and private resources.
Ho, who spoke at the start of the committee's housing-themed hearing, said the state's investments between 2012 and 2024 impacted almost 10,000 units and represented about $800 million in state commitments leveraged into $1.8 billion of total development costs. "Housing infrastructure bonds are a unique Minnesota innovation and something that's the envy of my colleagues across the country," she said.
Ho described HIBs as a financing tool suited to privately developed affordable housing that is not publicly owned: "Only about 5% of housing in the state would be eligible for general obligation bonds by being publicly owned," she said. She outlined uses supported by HIBs, including preservation of federally assisted rental housing, construction of permanent supportive housing, manufactured home community infrastructure and single-family home development through community land trusts.
Ho also detailed recent awards and program capacity: in 2023 and 2024 consolidated RFPs the agency funded dozens of developments but turned down many more applicants because resources were limited. She said Minnesota Housing's consolidated application process will open in April and noted the agency is tracking geography and balance between metro and Greater Minnesota when distributing funding.
Ho and fiscal staff provided figures about state debt service tied to housing appropriation bonds: fiscal staff said annual debt service is about $38 million now and will grow to roughly $41'$42 million as currently authorized but unissued bonds are sold.
The Commissioner cited specific project examples awarded HIB or related appropriations including preservation and repairs at Vikram Court (St. Louis Park), new homes at Cobb Cook Place in Hibbing, Minnetonka Mills Church single-family homes, Welch Place in Duluth and road and water connections at Woodlawn Terrace manufactured home community in Richfield. Ho closed by saying the agency will take the results of the legislative session and attempt to match investments to projects by the end of the calendar year.
Members had several follow-up questions about interest rates and debt service; Ho said HIB interest rates are "about a quarter of a percentage" different from GO bonds and deferred a detailed debt-service number to agency fiscal staff and Dan Kitzberger, her legislative director.
The committee then moved from the informational HIB briefing into a sequence of bill presentations on an informational basis; the committee approved the minutes from its March 20 meeting at the start of the session.
