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Lawmakers consider using Minnesota housing tax credit to leverage workforce housing in Greater Minnesota
Summary
Senate File 1906 would adjust the State Housing Tax Credit and related match rules so contributions can serve as matching funds for the Greater Minnesota workforce housing program and expand eligible uses and recipients. An oral amendment clarifying the geographic scope (outside the 7-county metro) was adopted before testimony.
Senator Nelson presented Senate File 1906, a bill to refine how Minnesota's State Housing Tax Credit contributions can be used for workforce housing development in Greater Minnesota. The committee adopted an oral amendment adding the words "outside the 7 County Metropolitan Area" to clarify that certain workforce housing match rules apply to projects in Greater Minnesota.
The proposal would allow contributions to the State Housing Tax Credit contribution fund to count toward the match for Minnesota Housing's workforce housing program in Greater Minnesota, expand eligible project uses (new construction, rehabilitation, demolition, acquisition and financing), permit regulatory incentives or waivers as part of proposals (for example, increased density or code flexibility), and expand eligible recipients to cities, federally recognized tribes, tribal housing corporations and tribal developers. The bill text also strengthens conflict-of-interest language to prevent contributors from directly benefiting from credits they helped fund.
Business and development witnesses supported the changes. Mark Borseth (Digi-Key Electronics) described a 0.3% vacancy rate in Thief River Falls and said his firm's entry-level wages exceed the income limits for many income-restricted programs; he and developer Skip Deschano urged allowing employer contributions and fewer income restrictions so workforce housing projects are financially viable in smaller communities. Libby Murphy of the Minnesota Housing Partnership and the League of Minnesota Cities testified the changes would reduce uncertainty for developers seeking state tax-credit contributions while pursuing workforce-housing program dollars.
The committee adopted the oral amendment and laid the bill over for possible inclusion; no appropriation vote occurred at the hearing.
