Minneapolis creates $5 million COVID-19 relief fund available to undocumented residents

    Minneapolis Mayor Jacob Frey
    Minneapolis Mayor Jacob Frey speaking at an event on affordable housing at the Federal Reserve Bank of Minneapolis in January 2020. Frey opposes the ongoing effort to replace the Police Department with something new. Photo by Max Nesterak/Minnesota Reformer.

    Minneapolis Mayor Jacob Frey announced Friday he will use his emergency powers to create a $5 million forgivable loan program to help renters and small businesses affected by the economic fallout from the spread of COVID-19.

    Unlike federal and state relief packages, families will be eligible for assistance regardless of their immigration or documentation status — offering a lifeline to thousands of people living in the city.

    “This program is designed to serve households that are not served by other COVID-19 related federal or state assistance,” Frey told the city council.

    The funding package includes $2 million for emergency housing assistance, providing up to $1,500 to households who have lost income because of the coronavirus and make less than 30% of the area median income ($31,000 for a family of four). In “extraordinary circumstances,” households may receive $2,000.

    The money will be paid directly to landlords or utility companies, even in cases of informal rental agreements, as is the case for many undocumented families.

    “Having the city step up to fill that gap is strategic, smart and most of all, caring,” said Council Member Alondra Cano.

    Another $1 million will go toward expanding the city’s “Stable Homes Stables Schools” program, which provides housing assistance to families with children in the city’s public schools. For homeowners, the city will provide $275,000 to provide free guidance in multiple languages about how to access relief options and contact mortgage lenders.

    The funding comes as the state legislature considers providing up to $100 million in housing support to low-income Minnesotans.

    The city will also increase funding for as many as 400 small businesses affected by COVID-19, with $2.2 million in forgivable no-interest loans.

    Minneapolis businesses with fewer than 20 employees or less than $1 million in revenue will be eligible to receive loans for $5,000 or $10,000 to go toward payroll, rent or mortgage payments and expenses. The businesses must be located in areas the city has already designated for additional economic investment as part of its racial equity plan. The loans will be forgiven if the businesses are still operating in 12 months.

    The small business funding will also go toward eliminating interest charges on an existing loan program for small businesses —down from 2% — that provides up to $75,000.

    City council members praised the mayor’s plan for its focus on racial equity and residents and businesses who have been left out of federal and state relief efforts.

    Council Member Lisa Goodman voiced her strong support for the plan, but also noted the strain COVID-19 is placing on the city’s finances and the need for greater federal and state funding.

    “The need is so much greater than what we have,” Goodman said. “Within a mere few months, we’re going to be making decisions about laying off our own staff in an effort to put money out the door. Those are the kind of choices we’re going to need to make.”

    Minneapolis recently instituted a hiring freeze and anticipates city revenue will fall by as much as $200 million.

    “These are painful decisions, but they aren’t difficult ones because they’re decisions that had to be made,” Frey said.

    The federal government is currently considering a fourth disaster relief package in response to COVID-19, which could include additional funding to state and local governments. But the city may still have to consider raising property taxes or adding fees to various services, even as many residents have seen their incomes slashed.

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    Max Nesterak
    Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Most recently he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.