Committee hears proposal for $200 million housing infrastructure bonds to build affordable homes
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Summary
Lawmakers and housing groups told the House Finance and Policy Committee that $200 million in housing infrastructure bonds would leverage federal and private funds to build and preserve affordable homes statewide; the bill was laid over for possible inclusion.
Representative Howard moved House File 3806 before the House Finance and Policy Committee, asking members to consider a $200 million housing infrastructure bond package intended to expand affordable rental and ownership housing across Minnesota.
The author said the state has used housing infrastructure bonds (HIBs) since 2012 to finance about 10,000 homes and that demand exceeds supply: "for every one proposal that MHFA is able to green light and fund, two are denied," he told the committee. Howard said a $200 million issuance could leverage significant other public and private investment to help address the state's housing shortage.
Supporters who testified included Jesse Hindle, executive director of Alliance Housing, who described the Kyle Garden Square project — 59 supportive units for chronically homeless adults — and said an investment at the proposed level could finance roughly 1,900 similar units. "With an investment like $200,000,000 in housing infrastructure bonds, we can build 1,900 more units like Kyle Garden Square to help Minnesotans across the state," Hindle said.
John Thorson of LiUNA Minnesota–North Dakota said unions support the bill because it would both expand housing and create "good family-sustaining jobs." Thorson cited data on housing cost burden, telling the committee that "more than 10% of Minnesotans, or over 640,000, are deemed cost-burdened." Chad Adams, CEO of the Southwest Minnesota Housing Partnership, described using HIBs to preserve and rehabilitate multifamily properties in Greater Minnesota and said the bonds often serve as a key piece to close deals where other funding sources are combined.
Members asked for more detail on regional allocations and fiscal impacts. Representative Mecklen requested a metro versus Greater Minnesota split; Howard said the program has tended to be regionally balanced, roughly "55/45" metro to outside the seven-county metro, and offered to provide exact figures. Fiscal staff Tara Heimer told the committee the current outstanding principal on issued HIBs is $474,465,000 and offered to provide debt-service appropriation figures on request; Howard estimated additional debt service of about $11 million in fiscal years 2028–29 to support a $200 million issue.
Some members raised questions about market timing and sellability in the bond market; Vice Chair Dotseth asked whether the bonds could take longer to sell. Howard said he had not heard that concern from bond agencies and agreed to follow up with fiscal staff.
After discussion, the chair laid HF 3806 over for possible inclusion in the bonding package, giving staff time to provide requested fiscal and programmatic details.
The committee next took up separate bills on owner-occupancy limits and mediation funding.
