The 2023 Minnesota legislature has produced historic investments in housing and homelessness. We are so grateful for you, our advocates, and the work you have put in for years leading up to this moment. We also want to applaud the work and passion of our legislative champions who brought these investments across the line. We have so much to celebrate; we would not have been here without the determination of advocates and partners like yourselves. If you would like to read about the journey we took during the 2023 legislative session, you can read our blog, The Path Towards a Pathway Home. If you would like to read a full summary of the $2.1 Billion dollar investment towards housing and homelessness, you can go to the MN Interagency Council on Homelessness website. You can also read a summary specific to MN Housing on their website.
Shelter Capital
What is it?
Shelter Capital funds are available to improve current shelters and generate new models to meet the need such as those that are culturally responsive, gender affirming, accessible, and are low barrier; shelter is the first step to finding permanent housing for families, individuals and seniors experiencing homelessness.
The Shelter Capital Needs Assessment conducted by MCH provides a breakdown of the statewide emergency shelter capital needs.
How much was appropriated?
The legislature made a $100M one-time investment in Shelter Capital through the Health & Human Services Committee. There were also eight shelters that had their own legislative requests that received a total of $37.53M of funding through the Capital Investment budget.
How much did we ask for?
We advocated for a $200M one-time investment in Shelter Capital to support the 86 shelter projects seeking state funds to complete projects.
Impact of this Investment:
Shelters in Minnesota lack ongoing state funding for capital needs. Funding the preservation and creation of shelter is key to meeting the growing community needs for emergency shelter and for providing safe, welcoming, accessible, and dignified spaces for people experiencing homelessness all across Minnesota.
How will this be allocated?
The Office of Economic Opportunity (OEO) will publish a Request for Proposals (RFP) this summer; decisions will be made approximately a few months afterward. While OEO has yet to determine the specifics, the following information is what we are expecting and MCH will send out the final information in the near future. Eligible applicants are non-profit organizations, local units of government, and Tribal governments. Eligible activities are; construction, acquisition, and/or renovation (including furnishings and equipment) for emergency homeless shelters serving youth, single adults, and/or families. We tentatively expect contracts to be in place before January 2024 with the funds being available through June 30, 2028.
Emergency Services Program
What is it?
The Emergency Services Program (ESP) is the state’s most flexible source of funding that allows organizations and local communities to meet the needs of people experiencing homelessness. ESP provides funding that supports shelter operations, outreach, motel vouchers and other key resources and services to support families, individuals, and seniors experiencing homelessness.
How much was appropriated?
Prior to 2022/23 the base funding availability was $1.68M. Starting in 2022/23 the base funding availability increased to $14.68M/. Moving forward due to the 2023 legislative victories:
- 2024/25 the base funding availability is $43.68M;
- 2026/27 the base funding availability is $68.68M;
- 2028/29 and on the base funding availability is $73.68M.
How much did we ask for?
Our original ask was a $40M increase for 2024/25 and $70M increase in 2026/27. For reference, the Office of Economic Opportunity received $222M in funding requests that were eligible use for ESP.
Impact of this Investment:
Investing in ESP supports emergency shelters in meeting the needs in their communities and helps people transition to a permanent home.
How will this be allocated?
The Office of Economic Opportunity awards funds biannually to local providers through a competitive application process. You can learn more here.
Family Homeless Prevention Assistance Program (FHPAP)
What is it?
The Family Homeless Prevention and Assistance Program (FHPAP) is designed to provide flexible financial assistance and/or supportive services to families, youth and single adults that are homeless or at imminent risk of becoming homeless. It provides supportive services and financial assistance, such as rent deposits, rent payments or utility payments for eligible households.
How much was appropriated?
FHPAP received a total one-time increase of $95M in one-time funding. This includes $50M that passed in March and another $45M that went through the typical legislative process. The budget will return to $20.538M starting in 2026/27. This is a historic funding investment! Additionally, for the first time ever, there is an FHPAP designation for tribes at $10M.
How much did we ask for?
Our original ask was for $200M ongoing, to meet the statewide need and support operations of the program.
Impact of this Investment:
Investing in FHPAP will prevent homelessness and provide assistance and support for individuals and families in securing and maintaining a permanent home. There will be a large amount of funding available over the next couple years so more people will be assisted in staying in their homes or moving into their homes. It is important to note this because as communities are making decisions on how to best use these resources, they will need to keep in mind that the budget for FHPAP will return to normal funding amounts in 2026.
How will this be allocated?
The Minnesota Housing Finance Agency (MHFA) had already released the FHPAP Request for Proposals (RFP), but now they have more funding to award.
Landlord Risk Mitigation Program
What is it?
The Landlord Risk Mitigation Program provides a financial guarantee (in case someone fails to pay rent or does damage to the unit) and support to incentivize landlords to rent to tenants with barriers such as poor credit, criminal backgrounds or poor rental history.
How much was appropriated?
The Landlord Risk Mitigation Program included up to $1M as an eligible use under FHPAP. It is also an eligible use of funding for the Bridges program. In past years, applicants could only apply for funding that would invest in a pool of funding for the landlord’s financial guarantee if something were to go awry. The legislation that passed included adding eligible uses of the funding for staffing and other organizational needs, whereas in previous years this was NOT an eligible expense. This was the most common thing MCH heard while doing listening sessions to set our 2023 Legislative Agenda and we are thrilled it was included.
How much did we ask for?
Our original ask was for $5M in ongoing funding, to establish it as a permanent program within MN Housing. It was operating as a 5 year pilot program that ended in 2022.
Impact of this Investment:
With a tight rental market, it can be challenging for any renter to find housing, especially for prospective tenants that face barriers to approval based on their credit, criminal, and rental history reports. Due to it being a part of the FHPAP and Bridges program, applicants will need to apply for Landlord Risk Mitigation funds through these applications. This is not ideal, as our hope was for it to be its own program but our hope is that it will get utilized and proven to still be successful so that it may one day become its own program.
Housing Support Income Modification for Community-Based Settings
What is it & What is the impact?
The 30% income modification provision ensures people with unearned income (SSI, veterans’ benefits, etc) pay only 30% of their income toward their Housing Support. Previously, folks with unearned income on housing support (in Community-Based settings) retained a fraction of their income, perpetuating poverty & housing instability for participants. This income modification was enacted and is an easy, long-overdue policy with numerous positive impacts.
Housing Infrastructure Appropriation and Public Housing Rehabilitation
What is it?
Typically, the legislature would have this funding go through solely the Capital Investment Committee. However, this year the funds were included in the Housing Committee and Capital Investment. Housing Infrastructure funds are to develop more affordable housing and Public Housing Rehabilitation is to preserve our public housing.
How much was appropriated?
Another historic investment, $200M was appropriated for Housing Infrastructure and $85M was invested in Public Housing Rehabilitation.
How much did we ask for?
$750M for Housing Infrastructure and $250M for Public Housing. While we did not get the full request, this was the most the Legislature has ever invested into these programs.
Impact of this Investment:
Investing in the building and preservation of affordable housing aids in addressing the full continuum of housing needs. These funds will create more permanent supportive housing for individuals, families, and seniors experiencing homelessness, including housing for people with a variety of health needs, as well as, investing in the preservation of public housing.
How will this be allocated?
The Minnesota Housing Finance Agency (MHFA) can award funding to projects that meet the eligibility criteria outlined on their website.
Transitional Housing Program (THP)
What is it?
Transitional housing provides short-term, affordable housing for families who are striving to overcome a variety of barriers to help them transition into stable housing in the community.
How much was appropriated?
Doubling the current income, THP will see a $6M increase in 24/25 and a $6M increase in 26/27.