Committee hears push to expand Greater Minnesota housing infrastructure fund

Representative Lehi Howard presented House File 1143 to expand funding for the Greater Minnesota Housing Infrastructure Grant Program, a state grant designed to defray the public infrastructure costs—roads, water, sewer, storm systems—that often prevent housing projects from “penciling out” in smaller communities. Howard told the House Committee on Housing Finance and Policy that the program is intended to address a market failure in Greater Minnesota where construction costs and appraisals or market rents do not align.

Multiple local officials, nonprofit leaders and business representatives testified in support. David Murphy, city administrator for St. Joseph, said developers in his community face seven-figure lift-station and other utility costs that halt potential single-family projects. Mayor Pete Hajduk of Hibbing said a 2023 housing study identified a need for about 1,200 units in Hibbing over the next decade; he described several local projects that face infrastructure funding gaps, including a multiunit project for which the Housing Redevelopment Authority secured $26,500,000 from Minnesota Housing but still needs road and utility extensions.

Kristin Insidi, CEO of Habitat for Humanity of Minnesota, described a proposed 26-home Hope Heights development in Red Wing where the program could cover roughly 50% of infrastructure costs if funded and matched locally. Mary Thompson of Heartland Lakes Development Commission provided a cost estimate for a 35-acre subdivision showing $3,859,460 in infrastructure expenses to create 85 lots—about $45,405 per lot—which she said would make homes unaffordable for moderate-income buyers without assistance. Dante Tomassoni of Cirrus Aircraft said the company, which employs 1,700 people in northeastern Minnesota, has lost candidates who declined job offers because they could not find housing locally.

Speakers emphasized that the program needs additional funding and an accessible application tailored to small cities. Cap O’Rourke of the Minnesota Association for Small Cities said application complexity can exclude small cities and urged a simple, targeted application process. Testimony also noted that although the legislative budget contained an $8 million allocation for the Greater Minnesota Infrastructure Program in 2023–24 and other aid for Greater Minnesota, the program’s application and rollout had not reached all intended communities.

Representative Howard thanked testifiers and said the bill is one part of a broader effort to address statewide housing shortages. Chair Igoe made the motion to lay House File 1143 over for possible inclusion in an omnibus bill; members indicated assent and the bill was laid over.