Minnesotans may be eligible for a tax credit of 85 percent of the amount they contribute to the Minnesota State Housing Tax Credit (SHTC) and Contribution Fund, as a way to help finance affordable multifamily and single-family housing throughout the state. The deadline to contribute is December 13. The fund has a limit of $11.6 million for 2023.
Earlier this month, a coalition of legislators, affordable housing developers, and contributors came together at Twin Cities Habitat for Humanity to raise awareness and encourage taxpayers to contribute to the fund. Contributions can be made to specific projects or simply to the general pool, with funds allocated to various entities such as cities, developers, nonprofits, or federally recognized American Indian tribes.
Individuals and corporations can contribute $1,000 to $2 million to the fund, and if eligible, receive a tax credit certificate equaling 85 percent of their total contribution. The fund will be administered by Minnesota Housing with taxpayer contributions being the only source of funding.
“We need as many solutions as possible. And this is one of them,” said Minnesota Housing Commissioner Jennifer Ho. “This is a brand new and unique opportunity for the agency,” she said. “I’m excited to see how individuals and companies are taking advantage of this new opportunity to build new revenue units and homeownership opportunities across the state.”
Developers are still able to submit a project to be considered as a part of the Designated Contributions, but the project “must result in new housing units or fund the rehabilitation of existing housing units.” Funds can be used to finance a variety of aspects including demolition, acquisition, rehabilitation, or affordability gap financing of single-family homeownership projects.
“Evictions are on the rise. Family homelessness is on the rise,” said Rep. Mike Howard (D-Richfield), at the December 1 press conference. “Underlying all of this is one of the nation’s worst housing shortages, especially for Minnesotans at the lowest income level,” he said.
A number of developers were also present to showcase and discuss their development projects that were eligible for the contribution fund.
Paul Williams, president and CEO of Project for Pride in Living, emphasized that the best way to address the housing shortage is a collaborative approach. “This is an all-hands-on-deck situation that we’re facing,” he stated. “It’s not just gonna fall to the government to solve this.”
Williams referred to two projects eligible for the contribution fund. The first, Opportunity Crossing on Lake and Nicollet, would revitalize the area struck by the civil unrest in 2020, following George Floyd’s murder. It would be a mixed-use building with businesses and 110 units of housing with an estimated cost of $60 million. The second project he shared was Nellie Francis Court at Highland Bridge, which would be dedicated to women coming out of homelessness.
Joanne Kuria of Amani Construction and Development described the tax credit program as a unique opportunity to get more people involved in providing affordable housing options.
“Folks often ask us, ‘How can we get involved? How do we assist you in this process?’ We say, if you can volunteer with us, that’s always a great opportunity. But this is a way that folks can contribute monetarily in a way without having to contribute thousands of dollars.”
Kuria is seeking to secure financing for Serenity Townhouses, a development project in partnership with the Rondo community.
“We are in our funding stages right now and hopefully receive funding for most of our sources this year going into early next year,” she said. “If all goes well, we’ll hopefully close in summer and either break ground in and towards the end of 2024, or in early 2025.”
Kevin Walker of Beacon Interfaith Housing Collaborative is also focused on helping people facing housing insecurity. The collaborative has two developments eligible for funding through the program and both aim to support individuals and families in search of stable housing.
The first development, Bimosaedaa, is located in downtown Minneapolis and will house 48 individuals, primarily of Indigenous backgrounds, who have experienced chronic homelessness. The name for the development came from the Ojibwe language, meaning ‘let’s walk together.’
“We’re partnering with Red Lake Nation and Avivo to produce this project and provide supportive services to the residents that we will serve at that building,” he said. “We expect to actually have our first resident moved into the building towards the end of this month, and then we should have it fully occupied by next spring.”
In case the fund reaches its limit or certain projects are funded beyond their goals, Commissioner Ho said that Minnesota Housing would create housing arrangements to allocate funding elsewhere.
“In the event that we get more contributions than the law allows for in 2023, and I certainly hope that happens, we’ll talk to the people that want to make those contributions and see if they want to roll that contribution into the next year,” she said.