Earlier this week, Governor Dayton released his proposal for bonding for this upcoming legislative session. Within the full $775 million proposal he put forth is $32 million for housing. This proposal is a major boon for housing, and includes much – but not all – that advocates asked for.

The Governor’s proposal includes:

• $25 million to address foreclosures, permanent supportive housing for the homeless, and federally subsidized rental housing. These bonds are Housing Infrastructure bonds, meaning the bonds will be sold by the Minnesota Housing Finance Agency, with the legislature pledging to repay through appropriating general funds.
• $7 million to rehabilitate aging Public Housing stock which serves extremely low income Minnesotans, including people with disabilities and seniors. These bonds are General Obligation bonds.

Advocates had hoped for $30 million and $10 million respectively for the two types of bonds, for a total package of $40 million.

Legislators disagree about not only the size of the bonding bill, but the type of projects which should be included. Disagreements, and eventually compromise, will follow over the course of the legislative session.

In the meantime, housing advocates are themselves considering the best strategy to ensure a positive bonding outcome for housing this session. We will have to determine whether to rally around the amount the Governor has proposed or to push for more. Stay tuned for updates.

See http://www.mmb.state.mn.us/doc/budget/bud-cap/12/gov-rec.pdf for the full list of proposed items in the Governor’s proposal. Housing items are on page 7.

Across the political spectrum, most Americans believe that young people should have the chance to complete their education if they are willing to study hard. But one well-meaning federal housing policy is forcing formerly homeless youth to choose between an education and keeping a roof over their heads.

Currently, the Low Income Housing Tax Credit (LIHTC), created in 1986, is responsible for at least half of the rental housing developments produced in the country and in Minnesota. In some cases, LIHTC has been used to create housing for homeless youth. However, one of the regulations for the program is the “Student Rule,” which stipulates that full time students cannot live in an LIHTC low-income unit as head of the household.  The rule was originally adopted to prohibit LIHTC resources from being used to build college dormitories, but the unintended consequences for formerly homeless youth have been severe.

As it stands, the rule requires students living in LIHTC-financed housing to certify that they are not attending school full time. In many instances, the youth are full time students when they are offered this housing, and thus must choose between cutting back on school and losing their housing assistance. To make matters worse, many students who choose housing lose their financial aid as a result of the change in student status.

Data collected in 2011 from two properties for homeless youth in Minneapolis run by the nonprofit developer Aeon demonstrate the strain this rule can put on the youth. Of the 27 students in these properties, 23 had to switch to part time student status to maintain their housing. In the last year, 10 students became ineligible for housing due to their school status. 

The Student Rule affects not just college students. In 2007 the Internal Revenue Service clarified its interpretation of the legislation, stating that the Student Rule included elementary through high school students in defining those ineligible to live in LIHTC properties. Back in 2008, 20 percent of the youths living in two properties operated by Aeon had to stop attending high school full time in order to maintain their housing.

Minnesota legislators have been in the forefront of changing the Student Rule for homeless youth. For the past three years Rep. Keith Ellison has been promoting a bill that would enable formerly homeless students to live in tax credit financed housing. In 2011 Rep. Erik Paulsen became a co-author of this legislation while Senators Franken and Klobuchar have supported the Senate companion bill.

MHP continues to work with these Minnesota legislators and local and national partners on modifying the Student Rule to make sure that homeless youth can have a home and able to study full time too. Contact [email protected] for more information about our latest legislative efforts and to get involved.

For housing advocates in Minnesota, 2012 is an exciting year at the state capitol. Bonding, bonding, bonding is the word, with housing advocates coming together in unprecedented ways to support investment of state dollars in housing. Two bonding bills for housing have been introduced, similar in all ways except for the amounts they would generate for housing. One includes $32 million for housing (part of the Governor’s bonding bill), and the other is a larger $40 million stand-alone housing bonding bill. The voices of advocates are being heard, and the optimism is contagious.

So what’s in the bonding bills again? The $40 million stand-alone bonding bill SF2073/HF2485 contains:

• $30 million for bonds that address foreclosures, permanent supportive housing for the homeless, and federally subsidized rental housing. These “housing infrastructure” bonds are sold by the Minnesota Housing Finance Agency, with the legislature pledging to repay over time.
• $10 million in public housing bonds would rehabilitate the aging public housing stock. Public housing serves extremely low income Minnesotans, including people with disabilities and seniors.

The Governor’s bonding bill has identical language, but the amounts for the two bond types come in lower, at $25 million and $7 million respectively.

The lobbyists at the capitol report that housing is getting good traction these days, thanks to many constituents making their voices heard. In addition to MHP and MCCD spearheading the HousingJobs Campaign, major organizational supporters of bonding for housing include Habitat for Humanity, Minnesota NAHRO, Minnesota Coalition for the Homeless, and Lutheran Social Services.

Hearings are expected March 5th on the $32 million bill in the Senate, and March 8th on the $40 million bill in the House.

This is a great time to thank the bill authors of the new $40 million bill with bi-partisan support. Co-authors include:

• Senators Pederson (St. Cloud); Hayden (Minneapolis); Tomassoni (Chisholm); Brown (Becker); Miller (Winona) in the Senate
• Representatives Howes (Walker); Hausman (St. Paul); McFarlane (White Bear Lake); Hansen (South St. Paul); Clark (Minneapolis); Ward (Brainerd) in the House.

Homes for All!

Decent housing saves lives. It rekindles hope and roots families and communities. In decent housing, the walls are strong and the roof is secure – and the family inside focuses more on thriving than surviving.

 

Register Now for Habitat on the Hill!

April 17, 2012 – 9am-4pm
Minnesota History Center, St. Paul:

No registration fee & lunch will be provided.
All-day parking is $5.

The Minnesota Housing Partnership hopes you will join Habitat at the Capitol to ask State Legislators to help us build Homes for All! Communities and families are facing hardships not seen in generations. Our work can go farther if our elected officials understand how hard we work to revitalize neighborhoods and create housing opportunities for those who have too often been overlooked.

With just a few work days left this legislative session, now is our last shot to make sure that Minnesota’s legislative leadership and Governor Dayton commit substantial bonding funds to housing. With homelessness on the rise and one-quarter of the state’s renters paying over half of their income for housing, we cannot afford to miss this opportunity.

Whether or not you have taken action so far this year, I ask you to take a few moments to contact Governor Dayton, legislative leadership, and your own legislators to let them know that you support bonding for housing. MHP’s action alerts make it easy to get a message, fax or phone call out, but you must do the clicking!

The House is expected to pass the much-awaited bonding bill on Monday with the Senate taking it up Tuesday. Housing is in good shape at this point; the current Senate and House bonding proposals include $35.5 million for housing, which actually exceeds the governor’s original proposal of $32 million.

However, until a bonding bill is passed, numbers on spreadsheets can change dramatically. Today’s Star Tribune points out that many projects that are high priorities for individual legislators and the governor are not included in the current House and Senate bonding proposals. There will be considerable effort to include those projects in the final deal making, which could happen this weekend. Furthermore, many legislators, particularly in the House, believe that the bonding package is already too large, and wish to cut projects. We had originally hoped for $40 million for housing– we must send the message: No further cuts to bonds for housing!

Bonding for housing would do a lot to address the things we are about: foreclosures, permanent supportive housing for the homeless, federally subsidized rental housing, and public housing. Not to mention create jobs.

Please click here to support housing today.

Chip Halbach,

Executive Director, MHP

This year, the state enacted $37.5 million in bonding to be used for housing and homeless programs through the Minnesota Housing Finance Agency. Both the amount of the bonding award and the scope of activities broke new ground in meeting the state’s growing housing needs.

The legislation contains $30 million in housing infrastructure bonds, $5.5 million in general obligation bonds for public housing rehab, and $2 million for the Harriet Tubman Women’s Shelter. This is the first year Minnesota Housing has been awarded more than $30 million in bond proceeds by the state. The state has appropriated an amount over $5 million in bond proceeds to the Agency only 5 times in the last 22 years.

This legislation is significant because it expands the use of bonds for housing. Historically, bonds approved by the legislature have been general obligation bonds. General obligation bonds are backed by the full faith and credit of the state and must only be used for publicly owned properties. General obligation bonds passed by the legislature for housing have usually been applied to properties serving the homeless such as emergency shelters and transitional housing. 

In contrast, the majority of the bonding for housing passed this year are appropriation bonds. While the state has no binding obligation to pay the future debt service on appropriation bonds, a failure to pay the bonds will likely result in a lowering of the state’s bond rating. Although appropriation bonds carry slightly more risk, they can be used for additional types of projects rather than being limited to publicly owned properties. View a chart that depicts recent expansions to housing bonds by clicking here. 

In 2008, Minnesota Housing first received the authority to use appropriation bonds to fund $30 million in nonprofit owned supportive housing. The success of these bonds set the stage for expanding Minnesota Housing’s use of appropriation bonds, which were called “housing infrastructure bonds” this year.

For the first time, the legislature authorized the agency to use the proceeds from the new housing infrastructure bonds for federally assisted properties owned by for-profit companies, in addition to those owned by nonprofits. This is especially important because so much of the federally assisted affordable housing stock is owned and managed by the for-profit sector. Regardless of ownership this stock often fails to generate enough revenue to ensure long term viability and requires an infusion of funding to preserve the quality of the housing.

In addition to preservation, the Agency is authorized to use the appropriation bonds for supportive housing and foreclosure recovery activities. Some of the funding will be used to acquire and rehabilitate foreclosed and vacant rental properties. The bonds may also be used for placing the land under foreclosed and vacant homes into community land trusts.

Another achievement this session is the state’s investment of $5.5 million in general obligation bonds for rehabilitating Minnesota’s public housing stock. This is the second time the legislature has demonstrated commitment to shoring up the state’s public housing. The state invested $2 million in bonding for public housing stock in 2009. MHP estimates the current rehabilitation needs of Minnesota’s public housing to exceed $400 million.

This legislative victory was accomplished with strong bi-partisan support. The governor and Republican and Democratic legislators responded to the needs of their constituents. Congratulations to all who helped with the enactment of the bonding in 2012. 

For many years Minnesota advocates have joined others across the country in trying to fix a policy which forces young, formerly homeless people to choose between a roof over their heads and devoting themselves full time to getting an education. Minnesota’s own Senator Al Franken has recently introduced a new bill which would address this pernicious housing policy issue.

Some background

The Low Income Housing Tax Credit (LIHTC), established in 1986, is responsible for most of the affordable rental housing produced nationwide. In the legislation behind this program, something called the “Student Rule” stipulates that full time students cannot live in an LIHTC low-income unit as head of the household, as a way to prevent scarce resources from being used to build college dormitories.

While the student rule made sense to prevent subsidy of less needy college students, once developers began using tax credits to house homeless youth, we ran into trouble. When homeless youth who are full time students are offered a spot in tax credit housing, they have to certify that they are not attending school full time. Both college and high school homeless students have had to choose between dropping to part time student status, and taking advantage of safe, affordable housing. Some students who choose housing also face losing financial aid as a result of their change in student status.

What’s happening

Senator Franken’s bill, “The Housing for Homeless Students Act of 2012,” creates an exception to the student rule for youth who have been homeless at any time up to five years prior to occupying a tax credit-financed apartment. Representatives Jim McDermott (D-WA) and Erik Paulsen (R-MN) are expected to introduce the companion bill in the House. Franken’s staff said that they are hoping to get a Republican senator to join their bill. Their legislative strategy is to include this student bill in a bigger package of various extensions of current tax policy that Congress is expected to pass in the lame duck session after the election.

Advocates are encouraged to contact Senator Franken and Representative Paulsen to voice support for the legislation.

U.S. Senator Olympia Snowe (R-ME) recently co-sponsored U.S. Senator Al Franken’s (D-MN) bill, “The Housing for Homeless Students Act of 2012,” which may bring us one step closer to a day when formerly homeless students may no longer have to choose between attending school full time or living with a roof over their heads.                                                        

The Low Income Housing Tax Credit (LIHTC), established in 1986, is responsible for most of the affordable rental housing produced nationwide. In the legislation behind this program, something called the “Student Rule” stipulates that full time students cannot live in an LIHTC low-income unit as head of the household, as a way to prevent scarce resources from being used to build college dormitories.

The “Student Rule” has led to disastrous effects for homeless high school and college students.  “High school students are too often faced with the very challenging choice between being a full time student […] or having safe housing […] but only progressing in high school on a part time basis,” said Elizabeth Hinz, Minneapolis Public Schools’ District Liaison for Homeless and Highly Mobile Students.  “Both are important for a basic foundation as a young adult.”

“The Housing for Homeless Students Act of 2012,” creates an exception to the student rule for people who have been homeless at any time up to five years prior to occupying a tax credit-financed apartment.  The bill was referred to the Senate Committee on Finance, of which Senator Snowe is a member.  Representatives Keith Ellison (D-MN) and Erik Paulsen (R-MN) are sponsoring the House version of this bill. 

As a result of November’s election, state housing advocates in Minnesota are gearing up for the legislative session with a major change in the composition of the legislature. With Democrats to command control of the House and Senate next year, housing advocates will be working with a different set of legislative leaders, some of whom have been long-time housing supporters.

The Democrats wrapped up the vote with a net gain of eleven seats in the House and ten seats in the Senate, to wrest control of both chambers by margins of 73-61 and 39-28, respectively. A full one-third of the state’s legislators will be new this session, leaving plenty of room for education of folks on housing issues.

But there’s also a lot that doesn’t change. For one, MHP will continue to work with many supportive legislators on both sides of the aisle. For another, Minnesota still faces a formidable deficit – to the tune of $1.1 billion for the next two-year budget cycle. We will be watching to see how Gov. Dayton and the legislature will approach raising revenues and funding programs, given the new balance of power.

And lastly, Minnesota’s need for affordable housing and services for people facing homelessness has not diminished. With 1 in 7 Minnesotans paying half or more of their income for housing, far too many families face tough choices to make ends meet.

Housing Poised for 2013

In 2013, many important priorities will need attention at the state capitol. Yet housing and homelessness is well-positioned to hold the interest of lawmakers on both sides of the aisle. The strong connection between quality affordable housing, economic competitiveness, jobs, and viability of local communities can be embraced by those across the political spectrum.

In addition, housing advocates are hopeful for a strong year ahead, thanks to the ongoing work of the Homes for All coalition, which formed last year. Homes for All is made up of Minnesota housing and homelessness organizations, including MHP, working to develop and advocate for common policy initiatives for stable and affordable housing in Minnesota. Homes for All will be looking to build on last year’s collaborative success in securing a bonding bill that included $37.5 million for housing.

Welcoming Back Housing Supporters

Many legislators who have invested substantial energy into addressing our state’s housing needs are returning this session, and some are returning as committee chairs overseeing housing policy and finance. Sen. Tomassoni has been assigned as Chair of Environment, Economic Development and Agriculture Finance and Sen. Sheran as Chair of Health, Human Services and Housing in the Senate. Rep. Karen Clark will be the Chair of Housing Finance and Policy in the House. We are also pleased that Sen. Hayden, a champion of housing, has been picked as the Senate’s Deputy Majority Leader. Click on the following links for a list of Senate and House Leadership and Committee Chairs.

A Powerful Housing Ally Loses a Seat

Rep. Larry Howes, a strong housing supporter, will not be returning in the next legislative session. He lost running against DFL incumbent John Persell, who became his opponent after redistricting. Rep. Howes was instrumental in ensuring that housing and homeless programs were included in the bonding bill last session. Politics in Minnesota noted about Howes:

The seven-term legislator and Capital Investment Committee chair was part of the dwindling contingent of old-school, get-a-deal-done Republican moderates at the Legislature. . . . As a vote-herder and political operator, he had few equals in either chamber.

Another strong housing supporter and former Vice Chair of Jobs and Economic Development, Rep. Carol McFarlane, has retired from her seat. We wish the both of them best of luck in their future endeavors.

Did You Know? A Fun State Policy Fact

Look for more soon in the Capitol Connect blog, as we move towards the start of the state legislative session.

In the meantime, we were intrigued to learn that during November’s election, more Minnesotans voted on the marriage amendment than for Obama or Romney. Voter turnout was 76%.