On Sunday evening, the Housing Conference Committee rolled out the agreed-upon deal on the housing omnibus bill between the House and the Senate. The language includes a record $1 billion in investments for housing programs, a new metro area sales tax increase, and a noticeable lack of policy.
Funds for housing opportunities
An investment plan has been formulated to establish a program that will provide down payment assistance to first-generation homebuyers. The initiative has garnered support from various stakeholders in the housing industry.
The program will allow first-generation homebuyers to apply for forgivable funds to assist with closing costs, down payment, or principal reduction. This appropriation is for $50 million.
Additional resources are allocated for homelessness prevention, homeownership investment grants, manufactured home lending grants, housing infrastructure bonds, and a new workforce homeownership program.
The House Housing Chair Mike Howard (DFL-Richfield) called the bill, “historic.”
New sales tax
The new metro-wide sales tax was originally only included in the House version of the bill, but the Senate agreed to the seven-county sales tax increase. It will raise taxes for shoppers by 0.25%, raising an estimated $350 million in revenue to be split to county aid, city aid and statewide rental assistance.
The agreed-upon language was first heard on the House Floor and passed on a partisan vote of 70-61. The Minority Housing Lead Rep. Brian Johnson (R-Cambridge) was “disappointed” in the final agreement. The Senate then heard the language on the floor on Tuesday and it too passed only with DFL support, 34-32.
“All across the country, state governments are addressing their housing inventory and affordability issues with both meaningful policy reforms and resources,” said Mark Foster, vice president of legislative and political affairs. “The Minnesota Legislature chose to focus on subsidies and not address the underlying issues of why housing is unaffordable for too many Minnesotan families. We hope the Legislature addresses this issue in 2024.”