Bills Introduced to Help Cities Combat Workforce Housing Shortages

The League-supported bills would provide more tools for cities dealing with workforce housing shortages.
(Published Feb 21, 2017)

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Bills providing tax increment financing (TIF) for workforce housing development and tax credits for workforce housing investments have been introduced in both the House and Senate. Providing more tools for cities dealing with workforce housing shortages is one of the League’s 15 legislative priorities.

Workforce housing TIF
HF 1178 (Rep. Paul Anderson, R-Starbuck)/SF 1168 (Rep. Mark Johnson, R-East Grand Forks) would allow cities to use TIF for workforce housing.

The bills await hearings in the House Property Tax and Local Government Finance Division and the Senate Jobs and Economic Growth Finance and Policy Committee. This provision was included in both the House and Senate tax bills in 2016, but was not included in the omnibus tax bill that was vetoed last year.

House co-authors include Reps. Dan Fabian (R-Roseau), Rod Hamilton (R-Mountain Lake), and Dave Baker (R-Willmar). Senate co-authors include Sens. Andrew Lang (R-Olivia), Bill Weber (R-Luverne), Dan Sparks (DFL-Austin), and David Senjem (R-Rochester).

Workforce housing investor tax credits
HF 1020 (Rep. Rod Hamilton, R-Mountain Lake)/SF 785 (Sen. Mike Goggin, R-Red Wing) would give investors of workforce housing a 40 percent state tax credit (up to $1 million) for contributions toward eligible rental workforce housing. A project must also have at least 50 percent non-state matching funds to be eligible.

HF 1020 was heard on Feb. 15 in the House Job Growth and Energy Affordability Policy and Finance Committee. The committee heard testimony in support of the bill from Dan Dorman with the Greater Minnesota Partnership; Abraham Algadi, Executive Director, Worthington Regional Economic Development Corporation; and Heather Corcoran with the League.

Background
A number of cities in Greater Minnesota have local employers that want to expand, but the city lacks adequate housing facilities to meet workforce needs. Advocating for more resources for workforce housing has been a priority issue for the League since 2015. The League was successful in securing funding for the Department of Employment and Economic Development (DEED) workforce housing grant program, but there are still cities facing barriers to have enough housing to support businesses that want to expand in their communities.

The League supports continued funding for the DEED program, workforce housing TIF authority, and an investor tax credit incentive program to help provide tools for cities to work with prospective developers of workforce housing.

We need your help
Cities experiencing a shortage of housing for potential expanding businesses should contact League staff to share your city’s story and discuss how the legislation could assist your community.

Cities are also strongly encouraged to share those stories with legislators, especially if they are on the House or Senate Taxes committees. You can encourage your members to sign on as co-authors to the legislation while it awaits a hearing.

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