Minnesota Housing Experts Discuss the Shortage
As part of the new Changemakers Alliance (CALL), Minnesota Women’s Press brought together in conversation experts in fields related to housing advocacy, city planning, and historic preservation to lend their insights into how the state can overcome this crisis and ensure all Minnesotans have livable options.
Heidi Swank, Executive Director of Rethos (formerly Preservation Alliance of Minnesota)
By getting a district preserved on a local level, you present a speed bump to developers tearing down affordable housing and putting up something bigger and more expensive.
During the 2022 legislative session, we are going to advocate for an eight-year extension to the Minnesota Historic Structure Rehabilitation Tax Credit [which offers a 20 percent state tax credit for qualified historic rehabilitations]. Pursuing affordable housing through a tax credit means money for development is leveraged by private developers, and a small portion of that is matched by state funds. Tax credits make these projects larger and create opportunities for more affordable housing.
Margaret Kaplan, President of Housing Justice Center
Historic preservation can also be used as a method of exclusion; in the areas in our community where you see a lot of residential segregation, we tend to end up with concentrated white affluence. But that is not inevitable.
Since the 1980s, the only real tool we have had in our tool kit for creation of housing at any level of affordability has been the Low Income Housing Tax Credit Program [which offers investors a 10-year reduction in tax liability in exchange for capital to build eligible affordable rental housing units in new construction, rehabilitation, or acquisition with rehabilitation]. It is a tool that developers designed their business models around and one that I expect will continue. But just because that is the tool we have does not mean that is the tool we need. It is inefficient. You get less than a dollar’s return on investment.
We have seen disinvestment in deeply affordable housing [affordable to residents who earn less than 30 percent AMI (area median income)] on the federal and state level since the 1970s. Well under one half of one percent of state- appropriated funds has gone to affordable housing. Housing is fundamental to almost every aspect of people’s lives. That is worth more than one half of one percent. So, let us continue to fund the low-income housing tax credit, but let us also invest in bigger solutions and bigger opportunities, [like] putting money directly into development. We have to stop thinking of tax credits as not real money — they use public dollars. The tax credit also supports a very lucrative business [for for-profit developers and investors].
Breanne Rothstein, Economic and Housing Director, City of Brooklyn Park
All of the $7.7 billion state budget surplus and any of the federal money needs to be put towards housing and, frankly, through the tax credit program and other housing construction opportunities. [But] that doesn’t get to a deeper affordability approach. We need more housing that is affordable to residents who earn less than 30 percent AMI, and every single layer of the government is going to have to participate to make that happen. There are not enough tax credits or Housing Infrastructure Bonds. There are limits on how much tax-exempt bonding Minnesota allocates, and we need to increase allocations. But tax credits alone do not produce affordable housing for households at 30 percent AMI. Politics and NIMBY [“not in my backyard”] also play a big role in the lack of production of multi-family housing. The minority voices who are against affordable housing have a lot of power and control.
Sue Watlov Phillips, Executive Director of Metropolitan Interfaith Council on Affordable Housing (MICAH)
MICAH works to prevent homelessness and meet the immediate needs of folks experiencing homelessness as we address the structural causes. Our focus is ensuring housing is available and affordable, especially for people who have incomes below 30 percent AMI.
MICAH also comments on how low-income housing tax credits are developed. One of the pieces that was just added into Minnesota Housing’s 2024–2025 Qualified Allocation Plan is that [in order] for developers to increase their score to receive those low-income housing tax credits, they need to have community conversations and engagement with the people who are actually going to be living in the building. MICAH is helping to facilitate those conversations.
We need to be honoring and protecting people’s civil rights and enforcing our fair housing laws, as well as ensuring all of our solutions are equitable. Right now we spend and subsidize at least four times as much on those who are homeowners as we do on creating and maintaining housing for people with limited incomes.
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Related Resources
Coming soon: News from the MICAH policy conversation with state legislators, Saint Paul City Council members, and Ramsey County Commissioners related to housing
