DFL lawmakers announce $3 billion package to address Minnesota’s housing crisis

DFL lawmakers from the state House and Senate on Wednesday unveiled their $3 billion package aiming to end child homelessness, reduce racial disparities in homeownership and ease the shortage of housing.

The DFL’s “All Roads Lead Back to Home” package would grant $350 million in rental assistance annually to low-income families, which lawmakers said would provide “housing stability” for 40,000 families. The proposal also invests $750 million for housing construction, which lawmakers say would create or preserve 4,600 homes. The package would infuse hundreds of millions of dollars into state programs that aim to reduce homelessness and build more affordable housing.

“Our state government simply has not made housing a priority. If our entire state general fund budget was a gallon jug of water, we would spend less than a tablespoon on housing. That’s simply not going to cut it,” said Rep. Mike Howard, DFL-Richfield. “It’s time that we stop admiring the crisis before us and start proposing bold, visionary solutions that will actually meet the challenge that’s facing Minnesotans.” 

The $3 billion housing package is double the amount Gov. Tim Walz allocated in his budget proposal. Walz’s $1.5 billion housing budget includes permanent funding to end veterans’ homelessness, increase affordable housing and prevent homelessness.

Walz’s budget takes on other priorities, like ending childhood poverty and making the state one of the best in the country for families and their kids.

When asked about the difference between the Walz and legislative housing budgets, Howard said the governor and lawmakers share the same goals and are having conversations about housing funds.

“I would argue you cannot end childhood poverty unless you end child homelessness,” said Howard, who also chairs the lower chamber’s Housing Finance and Policy Committee.

Minnesota Housing Finance Agency officials told lawmakers earlier this year that more than 554,000 Minnesota households spend over 30% of their income on housing — making necessities less affordable for low-income families. The DFL housing package would spend $350 million annually to provide housing stability for 40,000 of those families.

Even this ambitious plan, which is still far from becoming law, would make just a dent in the problem: Providing rental assistance to every family who needs it would cost $1.1 billion per year, according to a Legislative Budget Office estimate in 2021, before inflation hiked rents across the state.

Still, DFL lawmakers said their proposed investments would end child and youth homelessness in Minnesota by 2030.

First-time homeowners would also receive assistance under the DFL proposal. Lawmakers are proposing investing $175 million in down payment assistance, which would create 5,000 first-generation homeowners and cut racial disparities in homeownership by half, lawmakers said.