Governor Proposes Historic Investments to Address Homelessness and Housing Instability

Here is a summary of key items included in the Governor’s proposed budget and a few items from the proposed bonding bill. MCH wants to provide this to our partners in advocacy so you do not need to sift through hundreds of pages of material (links to materials are at the end of the blog). Please keep in mind the language used for each item is from the Governor’s Office or other State departments.

Items within the Governor’s proposed budget & bonding bill that are also on the 2022 MCH Policy Agenda:

  • $72.006 million for Emergency Shelter Facilities in general cash funding through the bonding bill. This is for local governments, nonprofits, and tribal governments for capital enhancements to existing shelters or to acquire new shelter space across the states.

  • $95 million spread out over the next three years for the Emergency Services Program. This investment will increase shelter capacity and services across the state, giving shelter providers that were under financial strain even before the COVID-19 pandemic the resources necessary to support increased operations costs, manage safe facilities, and deliver enhanced services to Minnesotans experiencing homelessness.

  • $250 million for Housing Infrastructure Bonds. Funds can be used for supportive housing, preservation, senior housing, single family development, and manufactured home communities. The Governor also recommends expanding the eligible uses to include new construction of rental housing for households with incomes at or below 50% of area median income. Eligible entities are for-profit developers, non-profit developers, Indian Tribes or tribal housing corporations, and local units of government. 

  • $60 million in General Obligation Bonds for preservation of public housing. This is to preserve existing public housing and keep it safe and healthy for residents. Funds are awarded statewide on a competitive basis to local public housing authorities for improvements in fire suppression systems, accessibility improvements, heating and cooling systems, building envelopes, energy efficient windows, elevators, and other critical health and safety items.

  • $3 million for the Transitional Housing Program (FY2024-2025). This program is the primary state program that funds temporary housing and wrap-around support services for individuals and families experiencing homelessness as they prepare to transition to long-term housing stability. The funds would be used to expand existing services, particularly in preventative programming.

Items within the Governor’s proposed budget & bonding bill that are not on the MCH Policy Agenda but are important programs and investments that will have a statewide impact. This is not an exhaustive list so please refer to the resources linked below if you want to see the entirety of the proposals.

  • Community Living Infrastructure Program ($11 million in 2024/25). Offers financial assistance to individuals with disabilities struggling with housing stability so they can move out of group homes or other congregate settings and return to permanent housing in the community. The program can cover rent and security deposits, utility set-up, and furnishing costs.

  • Community Stabilization for Naturally Occurring Affordable Housing ($100 million in 2023). This is a new program, and the resources will be used to acquire, rehabilitate, and preserve existing rental and homeownership housing so that it remains affordable for current and future households. With this investment, an estimated 2,850 homes will be preserved.

  • Downpayment Assistance ($12 million in 2023 and $20 million in 2024/25). Minnesota has one of the nation’s highest rates of homeownership (more than 70%), and also has one of the largest disparities in homeownership rates between white households and Black, Indigenous, and households of color. There are an estimated 179,000 renter households between the ages of 25 and 44 who are potentially income-ready to buy a home. With home prices increasing significantly in recent years and interest rates on the rise, the need for additional downpayment and closing cost assistance is critical to address the wealth needed to become a first-time homebuyer. This recommendation will help an estimated 2,667 households become first-time homebuyers.

  • Economic Development and Housing Challenge Program ($25 million in 2023 and $30 million in 2024/25). Will produce more new housing opportunities across the state. The priority for the funding will be on increasing rental and homeownership housing opportunities in communities where the lack of housing is impacting job growth, as well as providing downpayment assistance to first-time homebuyers through community-based nonprofit organizations and local units of government. This recommendation will create an estimated 1,225 housing opportunities across the state over three years.

  • Family Homelessness Prevention and Assistance Program ($19.5 million in 2023 and $19 million in 2024/25). The priority for funding will be on direct assistance, but the funds may also be used to better coordinate access to prevention services and funding. The housing assistance is typically paid to the housing provider or property owner. We estimate that the new funding will serve an estimated 19,250 households over three years.

  • Greater Minnesota Workforce Housing ($10 million in 2023 and $16 million in 2024/25). This program builds new rental housing in Greater Minnesota, typically in cities and towns with populations under 5,000.

  • Homeless Management Information System ($1.6 million in 2023 and $4 million in 2024/25). Assists with the ongoing maintenance and improvement of the Homeless Management Information System. The database supports programs across multiple agencies to serving individuals experiencing homelessness and allows the state to partner with other stakeholders to track progress and determine the best ways to target resources to meet the needs of this population.

  • Homeless Youth Act ($11.238 million in 2024/25). This is the primary program to assist homeless youth around the state. This additional investment in the HYA would enhance the supports provided to youth and young adults in need of assistance and increase the number of housing units for youth experiencing homelessness. This proposal also places an emphasis on young parents who are homeless and LGBTQ+ youth, who are disproportionately homeless compared to other young people.

  • Homework Starts with Home ($10 million in 2023 and $20 million in 2024/25, includes a change in eligibility by expanding to prenatal and Pre-K). Priority for the new funding will be to serve younger children and pregnant families experiencing, or at-risk, of homelessness. The funding will provide rent and other housing assistance to families with or expecting children that lack housing stability. 

  • Housing Support for Adults with Serious Mental Illness Program Expansion ($3,073 million in 2023 and $6,168 million in 2024/25). Provides support services to individuals with substance use disorders who are also homeless, long-term homeless, or at-risk for homelessness. These services help individuals to transition to and sustain permanent supporting housing.

  • Housing Transition Services through Housing Stabilization Services ($2.298 million in 2024/25). Assists people using Housing Stabilization Services Medical Assistance benefit as they move to stable housing in the community. The proposal would provide up to $3,000 per individual in moving assistance to cover rent or security deposits, utility set-up, and home furnishing.

  • Housing Trust Fund ($10 million in 2023 and $25 million in 2024/25). Provides rental assistance for individuals and families. The state’s rental assistance program helps meet the overall need in the state that is not met through federal programs. Only one out of every four individuals/families that is income-qualified for federal rent assistance receives it. 

  • Landlord Risk Mitigation Fund ($5 million in 2023). Provides a financial guarantee, and case management services, to incentivize rental housing owners to rent to tenants they would otherwise not likely rent to.

  • Projects for Assistance in Transition from Homelessness ($5 million in 2023 and $10M in 2024/25). The program provides outreach and support services for individuals with serious mental illness who are experiencing homelessness, particularly individuals who are living in encampments, under highways or bridges, and other areas that are not fit for human living.

  • Strengthen the Supportive Housing Model ($12 million in 2023 and $30 million in 2024/25). Will strengthen supportive housing for individuals and families who are at risk of or have experienced homelessness. The funding may be used to create partnerships with the health care sector to demonstrate more sustainable ways to provide services for supportive housing residents, improve access to health care, and reduce use of expensive emergency and institutional care.