Minnesota task force adopts 19 recommendations to shore up affordable-housing preservation, drops contested HUD subordination language

The Legislative Coordinating Commission task force on long-term sustainability of affordable housing approved a 19-item final report Friday that directs state agencies and local partners to pursue new approaches to preserve regulated affordable housing, strengthen funding flexibility and pair services with capital investments.

Senator Lindsay Port, co-chair of the task force, opened the meeting by outlining the day’s agenda and said members would vote on a set of recommendations that staff had organized into a consent-like group and a set for individual roll-call votes. Representative Mike Howard, the co-chair, urged that the work continue after the report’s submission and said the recommendations must lead to concrete action rather than sit on a shelf.

The task force approved eight recommendations in a grouped roll-call vote (recommendations 3, 4, 9, 10, 11, 12, 18 and 19) and then proceeded to vote on the remaining items individually. Evelyn Wier of the Legislative Coordinating Commission read each recommendation and conducted roll-call votes; as recorded on the transcript, the group motion passed with 17 yes votes and one absence. Subsequent individual recommendations passed with varying tallies, including Recommendation 1 (approved as amended: 15 yes, 3 abstentions, 1 absence) and Recommendation 2 (approved: 14 yes, 1 no, 3 abstentions, 1 absence).

The approved recommendations address a range of actions, including directing Minnesota Housing and local suballocators to amend Qualified Allocation Plans by June 1, 2026, to revise selection criteria (Recommendation 2); encouraging Minnesota Housing to develop a policy framework to support sustainability of regulated affordable housing as distinct from new construction (Recommendation 3); allowing inclusion of asset-management fees in underwriting (Recommendation 10); and directing state agencies to study insurance-market pressures and the feasibility of state financial supports for providers facing excessive premium increases (Recommendations 18 and 19).

One item drew prolonged concern: new replacement language for Recommendation 8 would have asked Minnesota Housing and other public lenders to collaborate with HUD on a subordination agreement to enable FHA-insured first mortgage products while recognizing state investments. Several members said the reworded language had not been vetted by the full task force and risked signaling approval of a specific negotiating position rather than a neutral policy goal. Andrea (task force member) said, “I have a big problem with the rewording of this language without full discussion and understanding on the part of the task force.” James (task force member) and others recommended removing the item from the agenda. Staff confirmed that scrapping the recommendation required no formal vote, and the task force did not take a vote on Recommendation 8.

Representative Howard closed the meeting by emphasizing urgency: “The status quo is failing Minnesotans,” he said, urging the administration and agencies to act on the recommendations. He and Senator Port said the final report will be finalized and submitted to the legislature and agency leaders by Feb. 1, 2025, and that legislative hearings will follow. Staff were authorized to make technical edits and chairs were authorized to approve the final report and meeting minutes.

Votes at a glance: the transcript records the grouped approval of recommendations 3, 4, 9, 10, 11, 12, 18 and 19 (17 yes, 1 absent). Recommendation 1 passed as amended (15 yes, 3 abstentions, 1 absence); Recommendation 2 passed (14 yes, 1 no, 3 abstentions, 1 absence); several others (including 5, 6, 7, 13, 14, 15, 16, 17) passed with recorded tallies commonly reported as roughly 15 yes, 3 abstentions and 1 absence. Recommendation 8 was removed from consideration after members raised substantive concerns.

The task force’s recommendations focus on preservation (including policy and underwriting changes), operational flexibility for providers, pairing services funding with capital investments for permanent supportive housing, improved data collection and insurance-market study, and new or increased funding mechanisms (including recommendations to expand State Affordable Housing Aid flexibility). The chairs and staff said the work will move into legislative committees soon after report submission and invited task force members to provide testimony at those hearings.

The meeting adjourned after member reflections that praised the collaborative process and urged rapid implementation and ongoing cross-jurisdictional collaboration.

Ending: Staff will finalize the report with technical edits and submit it to designated legislative committees and the legislative reference library by Feb. 1, 2025; chairs will schedule committee hearings and members were encouraged to participate in forthcoming legislative briefings.