Housing advocates see 'grand alliance' to push for funding at Capitol

At Sven Clogs in Chisago City, the shoe sprayer lives in Osceola, Wis. The shop manager drives from White Bear Lake. Two quality-control staffers live closer to work but said they search every day for more affordable places.

"I swear, I'm just going to put up an apartment building and call it Sven's apartment building," said owner Marie Rivers, who called the lack of affordable housing in the community a "nightmare" for her staff.

Employers like Sven have joined the push for more housing, along with cities, counties and chambers of commerce. Teachers whose students suffer without stable homes are talking about it. Health care professionals recognize the physical and mental toll of homelessness.

Housing advocates aim to harness the energy and encourage a new set of state leaders to spur construction and preserve affordable properties.

"It's a moment in time where we have a great — I'd call it a grand — alliance," said Greater Minnesota Housing Fund President Warren Hanson, who has been involved in housing advocacy in the state for 25 years.

In the first big housing proposal of this legislative session, a coalition of more than 200 nonprofits, cities and other organizations recommended the state devote $430 million to housing over the next two years. The Homes for All group asked the Legislature to borrow $300 million to build housing, add $80 million for state agencies' housing and homelessness efforts and create a $50 million tax credit fund to support affordable housing projects.

If the idea progresses, it would be the state's largest investment of that type in housing, said Rep. Alice Hausman, D-St. Paul, chairwoman of a newly formed Housing Finance and Policy Committee. Nonetheless, Hausman described Homes for All's borrowing proposal as "doable," envisioning $150 million this year and $150 million in next year's bonding bill.

Democratic Gov. Tim Walz and the new Minnesota Housing Commissioner Jennifer Ho said they are still developing the next two-year budget and talking about how to address housing needs. But Walz said housing is a priority for his administration and is fundamental to a child's education.

"A child can't learn if they don't have a home," he said. "Understanding what that looks like, of how we partner and build that, is the stages we are in."

The governor must present his budget by Feb. 19, and requests for additional cash for housing are competing with numerous spending priorities. State budget officials' projection at the end of last year of a $1.5 billion surplus looks generous, but lawmakers have said it really leaves little room for additional spending. Inflationary costs could eat up about three-quarters of the surplus.

A number of initiatives with significant price tags are bouncing around at the Capitol, Minneapolis Regional Chamber of Commerce President Jonathan Weinhagen said, but housing is interconnected with a lot of those other goals.

Conversation is widening

In the past 18 months, the discussion around affordable housing has intensified, Weinhagen said. The affordability of homes in the Twin Cities has been a competitive advantage for businesses recruiting employees, he said, and while the Twin Cities area is not Seattle or San Francisco, price increases have caught businesses' attention.

"If we don't intervene, I think you're going to continue to face challenges as our population grows," he said. "There's a supply and demand issue."

Weinhagen stood with the Homes for All coalition when they introduced their plan last week. The chamber has formally endorsed the $50 million tax credit proposal, where businesses or organizations that put money toward affordable housing projects get a credit on their state tax liability. Sen. Carla Nelson, R-Rochester, is sponsoring the proposal.

While workforce housing ideas have drawn interest from both sides of the aisle, persuading politicians to spend millions on sheltering the long-term homeless can be a bigger challenge.

As housing commissioner, Ho brings two decades of experience combating homelessness and was also a senior policy adviser at the U.S. Department of Housing and Urban Development under the Obama administration. Last week, she spent a night participating in the federally required annual point-in-time count where communities tally the number of homeless people in their area on a given night. On the light rail alone, her team counted hundreds of people who are homeless, she said.

"Homelessness is not a separate issue from housing affordability and the availability of homes," Ho said. "You don't end homelessness without getting to the source of the problem, which is housing that's affordable to people at all incomes. Homelessness is simply the lowest, lowest income instance of that."

Former Gov. Mark Dayton gave the Walz administration a jump-start on the housing conversation by creating a Governor's Task Force on Housing, which came out with a report in August outlining a road map to address the situation.

The task force found Minnesota needs to build 300,000 new homes by 2030. Over the next five years, the private market should be adding 10,000 more homes per year than it is now, the report said. The state also needs to preserve the affordable housing stock that now exists, the task force said. About 2,000 rental units that were affordable are disappearing every year as the properties are sold, improved and rented at a higher cost.

At Sven Clogs, several employees said Monday that the need for more construction has been clear as they search for apartments or houses.

Jonny Hillstrom, who oversees production, wants to get a bit closer to his job — which is in the area where he grew up and where his band practices. He and his girlfriend also hope to escape the $1,500 monthly rent they pay for a two-bedroom apartment in White Bear Lake.

The best option they have found is buying his aunt's Forest Lake home. The couple would need to rent out rooms to a friend or two, he said, but that's "what you got to do to make it work."

Jessie Van Berkel • 651-925-504