Over the next two years, Minnesota will spend an extra $1.3 billion from its budget surplus on housing. A new 0.25 percent sales tax in the metro will add hundreds of millions more to tackle a growing problem.
More than 550,000 Minnesotans pay above what's considered affordable for a roof over their heads, according to Wilder Research. Recent homeless counts have shown more families winding up in shelters, and the number of homeless people in the state has remained steady over the last five years.
So how will this money be spent and what difference will it make? Minnesota Housing Commissioner Jennifer Ho joined All Things Considered Monday with a preview.
Hear the conversation using the audio player above or read a transcript of it below. Both have been edited for clarity and length.
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Help us put this infusion of funding into perspective. How significant is this?
Huge, I think is probably the easiest way to describe it. If you think about our regular budget, it's about $125 million for every two year period, which is how the legislature budgets and so adding $1.3 billion is huge and it's exactly what's needed right now.
More families will get rental assistance. Who and how will it work?
The state rental assistance program is really designed to look a lot like what a housing choice, [or Section 8], voucher would look like. So it’s targeted at low income families and would allow [them] to only pay 30 percent of their income toward rent and the rental assistance would make up the difference.
So it's a proven model. It's been in existence. But the [federal housing choice] vouchers only assist about one in four households who are eligible for it, so this just helps those who otherwise would be eligible but don't have access.
The money here that is earmarked for homeless prevention, what will it do and how will it work?
As was really highlighted throughout the course of the last few years, when a lot of people were economically hard hit because of the pandemic, if you fall behind on rent, you can get evicted and it can become even harder to get back into a home. So what we can do is, for people who get behind, we can help them get caught up. We can also help people who have recently become homeless get back into housing.
There's money here to build new units. Is that what we're talking about when it comes to affordable housing, or is it also making other housing that’s already built available at a more affordable rate?
We'll be able to do a lot of new production, as well as preservation. There are a lot of units and rental housing out there that might be older and sometimes they will get sold and somebody will remodel them and price [people] out of the market. And so one of the new programs that we’ll have is a community stabilization program that's going to allow us to work with partners to make sure that affordable units that are in the community today remain affordable.
The thing I'm also really excited about is that we will do this in every corner of the state. Some of these programs are targeted specifically to Greater Minnesota and smaller communities. But I expect that we're going to see development projects springing up all over the state as a result of these investments.
Much of this is one-time money. What would be at risk of going away when this money goes away?
A lot of this is a one-time investment in the construction of a new building or a new home. I think that with some of the programs, like homelessness prevention, we know that we've never funded it at the state at the same level of people who are having a crisis and so to be able to build that base over time will be important.
Some of the surplus [also] made significant investments in other things that are going to help families with housing stability, like the Child Tax Credit, education and other things like that. So we see the whole package as really a winning package for Minnesotans.
I would like to see it not be a one-and-done piece, but with $1.3 billion and the timelines of construction, we're going see this money going into the ground, not just in one year, two years, but probably over the course of the next four or five.