Advocates for low-income renters have asked Gov. Tim Walz and state legislators to refill the accounts of the state’s pandemic-related rental assistance program. A coalition called Equity in Place wants an additional $330 million from the state’s budget surplus — or unspent federal COVID response money — put into the now-halted RentHelpMN.
It could be a tough ask. While refilling the fund had support from key housing committee leaders, the proposal didn’t make it into the House DFL omnibus bill that addresses housing issues. And criticism of the way the program was run by the state Housing Finance Agency makes it unlikely that Senate Republicans will agree to keep RentHelpMN alive with an infusion of state cash.
But advocates are undeterred by those political headwinds. Endorsed by a group of county and city council members from the Twin Cities, the coalition request is based on the assertion that there are still tens of thousands of tenants who did not get help from RentHelp.
“Guess what? This isn’t a mysterious problem with mysterious solutions. Some problems you can actually put money at and it will make a big difference,” said Margaret Kaplan, president of the Housing Justice Center. “We are a prosperous state. We have a budget surplus of over $ 9 billion. We have over a billion dollars in federal funding that is meant to prevent some of the issues we’re having today as a result of COVID.”
“Hello, Gov. Walz. Can you see this?” asked Lucretia Brewer of Newport directly to a camera during a press event Thursday. She said RentHelpMN, “kept me safe and housed this winter. The abrupt stopping of RentHelp caused a lot of angst among many people I know.”
It isn’t that Walz and House DFLers aren’t putting budget surplus money into housing programs. Walz proposed adding $410 million to the current two-year budget for housing programs, with the biggest portion — $100 million — directed at preserving and improving non-public affordable housing. Walz also included $32 million for down payment assistance and new money for homelessness prevention.
In his capital construction plan, Walz has also proposed an additional $259 million in housing infrastructure bonds to subsidize new low-income housing projects and another $60 million in bonds to rehabilitate existing public housing.
The House DFL budget plan puts $230 million towards housing and has a $25 million grant program for counties to deliver rental assistance either directly or through nonprofit agencies. It also adds $100 million to existing programs, including rental vouchers and Homework Starts at Home, a grant program aimed at addressing homelessness and housing instability among students and their families.
The bill also expands the rental income tax credit and provides new down payment assistance for first-generation homebuyers. “We want to reduce costs for renters and create more homeowners,” said House Housing Committee Chair Alice Hausman, DFL-St. Paul. “We need both rental assistance and down payment assistance.”
The House DFL housing budget bill represents a 183 percent increase in appropriations for that area compared to the current two-year budget passed last June.
None of the current proposals, however, put substantial money into direct rental assistance — and none would restart RentHelpMN which is in the process of giving away the last of the federal money sent to states last December and April. An eviction ban that now applies only to tenants with active applications into the program expires in June.
The agency has made payments directly to landlords totaling $436 million but ended applications in January. According to the National Equity Atlas, which compiles survey data from Census and academic surveys, 77,000 Minnesota households are behind on rent payments with rent owed totaling $149 million. The surveys indicate a disproportionate share of those behind on rent are people of color (45 percent). The same survey estimates that more than half of the renters who could be eligible didn’t apply for help.
Senate Republicans have been critical of the Minnesota Housing Finance Agency, which operated the nearly $600 million federally funded rental assistance program along with the larger counties in the state, and don’t want to put more money into the program. And DFLers are devoting new housing money to other programs.
Owen Duckworth, director of organizing for The Alliance, a coalition of community organizations and advocacy groups, said money from the state and federal government, along with the ban on most evictions, helped keep many people in their homes. But the political will to continue those programs “dissolved over the last few months,” he said.
“We’re unfortunately at the stage of the Legislative session where we’re seeing some of the budgets start to be discussed in a more concrete way and we do not see nearly enough resources in any of those budgets for rental assistance at the scale we’re talking about now,” Duckworth said.
Rep. Mike Howard, DFL-Richfield, is one of the sponsors of a bill (House File 3667) to send $330 million to the housing agency. Though it passed the Housing Committee with votes from both parties, it did not end up in the same committee’s budget bill. “I am more frustrated that we didn’t quickly take action on rental assistance once RentHelp closed and we saw the extent to which folks were out on a limb,” Howard said. “The funding dried up at a time when the need was actually growing.”
But the Senate gave no signal it would be open to it, “and it felt like we had a window of time” to keep the program open that was missed, Howard said.
Howard defended the House budget and also pointed to other aspects that expanded and simplified the renter’s tax credit; added down-payment help for first-generation homebuyers; and created a child care tax credit and child tax credit for lower-income residents.
The Minnesota Budget Project, an affiliate of the Minnesota Council of Nonprofits, termed the changes to the renter’s credit “revolutionary.”
“An estimated 120,000 renters who are currently eligible but don’t currently claim the credit are expected to begin claiming it under the new process and receive an average Renters’ Credit of about $700,” the budget project wrote. “Another 36,000 renters would become newly eligible and receive an average refund of around $400.”
Sen. Rich Draheim, R-Madison Lake, the chair of the Senate Housing Committee, said he is unwilling to put more money into a Housing Finance Agency, which he thinks mishandled the RentHelp program.
“That format didn’t function very well and was plagued with problems,” Draheim said. “If we needed to put extra money into an ongoing program that wouldn’t be my first choice. My faith in the department being able to timely operate a program is not too big.”
Draheim also said the economic impacts of the pandemic have lessened. “But we need to take a step back and ask, ‘Why do we need these funds when we have a record number of job openings out there?’” he said.
Draheim added that people who continue to have trouble paying rent are supposed to be helped with existing housing stability programs. “What are we doing with the hundreds of millions in housing stability programs that we already have? That means our existing programs are failing. We need to unpack those. Why aren’t the existing programs working?”
His housing budget appropriates $50 million in supplemental funding for housing and recasts another $15 million from unspent money from the two-year budget. His emphasis is on helping families own single-family homes, and he said last year’s budget adopted historic levels of housing infrastructure bonds that are used to subsidize nonprofit housing development.