'For Rent' signs needed to bring jobs to Greater Minnesota?
ST. PAUL — The shortage of workforce housing is hampering some communities' abilities to create jobs in greater Minnesota.
A bill by Rep. Rod Hamilton, R-Mountain Lake, is intended to spur construction of housing in rural areas and smaller cities where the number of jobs is outstripping available housing units.
It would create a refundable workforce housing tax credit, and give the Department of Employment and Economic Development $40 million to dole out to people who invest in qualifying developments. The money would be spread out over tax years 2018-23.
Per the bill, "Any portion of credits not allocated by the commissioner for any taxable year does not cancel and shall be carried forward to the subsequent taxable year."
The House Job Growth and Energy Affordability Policy and Finance Committee approved the bill this week sending it to the House Taxes Committee. The companion bill, sponsored by Sen. Mike Goggin, R-Red Wing, awaits action by the Senate Taxes Committee.
The credits would equal 40 percent of the investor's investment, to a maximum of $1 million for a $2.5 million investment. Multiple investors in a single qualifying project would each be eligible.
For investors to be eligible, a project would have to consist of at least three units, cost to build on average, between $75,000 and $250,000 per unit, receive more than half its financing from other sources and not include financing that requires tenants' incomes to fall under set limits, or that is for flood recovery.
The bill would restrict project sites to areas outside the seven-county Twin Cities metropolitan area, in low-population density areas (specifically including Cook County), cities with at least 500 jobs and areas within 15 miles of a city where the rental housing vacancy rate has been no higher than 4 percent for two of the last five years.
Rep. Karen Clark, D-Minneapolis, questioned a requirement that projects include no units for tenants who qualify for federal housing assistance. "Why would you want to exclude those lower income people?"
Abraham Algadi, executive director of the Worthington Regional Economic Development Corporation, said the market in that segment "is being taken care of." The bill, he said, targets a gap in the market between housing for lower income people and higher-end, owner-occupied housing.
Steller reports for Session Daily, a nonpartisan Minnesota House Public Information Office online publication.