Minnesota Gov. Walz proposes $276 million for affordable housing projects

MINNEAPOLIS (AP) — Minnesota should borrow $276 million to invest in safe and affordable housing projects across the state to benefit the homeless, seniors, families and veterans who have been shut out of the market, Gov. Tim Walz said Thursday.

The Democratic governor outlined his proposal at Minnehaha Commons, a new apartment building in south Minneapolis for low income veterans and older adults who have experienced homelessness. The building was financed with state bonds. It was the first of four presentations that the Democratic governor has planned over the next week on his public works borrowing proposal for the 2020 legislative session, which opens Feb. 11.

Walz told reporters that his “Local Jobs and Projects Plan” will total around $2 billion, but he declined to give a precise total because his goal with the spread-out announcements is to keep the focus on the kinds of projects that would be funded.

“Whether it’s improving safety at an underpass in Moorhead or fixing a leaky roof at the National Guard armory in Rosemount, we can’t wait on these projects,” he said. “The needs are real, interest rates are low, there’s no reason not to act.”

Borrowing packages known as bonding bills are usually the top items on the Legislature’s agenda in even-numbered years. Democrats who control the House are expected to offer a plan as big as $3.5 billion i n the coming weeks, while Republicans who hold a majority in the Senate are expected to offer a smaller proposal. The final compromises over which projects make it into these bills are usually the subject of intense negotiations late in the session.

The affordable housing component of the governor’s plan includes $200 million in housing infrastructure bonds that would be awarded to developers statewide through a competitive process. It also includes $60 million for rehabilitating public housing. He also recommended $14.9 million for modernizing state-run veterans homes.

Walz plans to announce details of his water quality and infrastructure plan on Friday, his higher education facilities proposal on Monday, and his public safety and local projects package on Wednesday.

“Every Minnesotan deserve a safe and affordable place to call home,” Walz said — a need he said was underscored by the displacement of around 200 people on Christmas Eve when a fire destroyed a downtown Minneapolis homeless shelter.

Housing Commissioner Jennifer Ho said they decided to “go big” with the request.

“Across our communities large and small, we need more housing,” she said. “We’re 50,000 units short. And we’re especially short on housing for our lowest income neighbors, those who earn less than $30,000 a year.”

Republican House Minority Leader Kurt Daudt, of Crown, said in a statement that his caucus wants to see a “responsibly sized bill” focused on job-creating infrastructure such as roads and bridges, water projects and maintaining state-owned facilities. He said last month that he wants the Legislature to pass something less than $2 billion.

And Rep. Tama Theis, of St. Cloud, the lead Republican on a House housing finance committee, said in the same statement that the state needs to bring down the cost of home building to solve the shortage of affordable housing.

“Bonding investment is part of the solution, but must be met with broad changes to state codes, zoning, land development rules, and other regulations that are driving up costs and making home ownership unaffordable for too many families,” she said.