MN House passes $1 billion spending housing bill, 0.25% metro sales tax hike

Minnesota will spend $1 billion over the next two years to provide affordable housing under a bill passed Tuesday by the state Senate. The vote was 39-28.

The legislation, sponsored by DFL Sen. Lindsey Port of Burnsville, aims to reduce child homelessness, reduce racial disparities in home ownership rates and subsidize the construction of more affordable homes.

It would also impose a 0.25 percent sales tax increase in the seven-county metro area to help pay for new housing programs. The tax would raise about $353 million over the next two years and $391.2 million in 2026-27.

The bill would provide eight times more money for housing than the state currently spends, Port said. Most of the funding — about $750 million — would go toward building new homes.

It now goes back to Parliament, which passed a similar measure next week. If the two chambers resolve any differences, the bill will go to Gov. Tim Walz, who has pledged to sign it.

Port said the measure would increase housing supply across the state, provide rent subsidies to low-income families to prevent homelessness and provide down payment assistance to first-generation homebuyers, which would help close racial disparities .

Currently, she said, 70 percent of white families own their homes, compared to 25 percent of black families and 17 percent of Native American families.

If passed, the new law would provide a “monumental step toward affordable housing,” Port said.

Senate Republicans agreed that the state should address the affordable housing shortage, and while they supported steps to provide more housing, they offered a number of amendments aimed at reducing construction costs. All were defeated on party votes.

But many Republicans voted for the bill.

“We all have a passion for housing,” said Sen. Eric Lucero, R-St. Michael.

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