For more information contact: Joan Nichols 651-29X-XXXX
The American Recovery and Reinvestment Act became law on February 17, 2009, infusing a historical outlay of tax credits and spending to help fix the American economy. The economic stimulus plan includes substantial affordable housing investments, dedicating over $300 million to Minnesota housing and community development needs.
I’m heartened by the Obama administration’s commitment to fix the economy by fixing the housing market. The two go hand-in-hand. Families in Minnesota and across the nation are facing unprecedented hardship and homelessness is increasing as job losses and foreclosures continue to climb. Combining housing stimulus with a general economic recovery plan will generate economic activity that promotes growth across all sectors of the economy and will help us to reduce the deficit.
Housing stimulus is essential to our economic recovery. A summary of some key housing-related provisions in the federal stimulus bill and its impacts on Minnesota include:
• Minnesota will receive $30 million in Neighborhood Stabilization Program funds that can be used to address foreclosures.
• A new HUD program that will allocate $3.75 million for energy retrofitting and “greening" of federally assisted housing in Minnesota.
• Minnesota will receive $120 million (12 times the typical amount) in weatherization funds to be distributed by the Minnesota Department of Commerce through a network of community agencies.
• Section 8 assisted rental housing owners can receive full year payments owed them under their federal HUD contracts to preserve more housing affordability.
• Over 120 Minnesota public housing agencies will receive part of $56 million in capital funds to help fix up public housing that’s in disrepair across Minnesota.
• Funds for low income housing tax credit projects will allow swapping of tax credits for cash that can be used for rural and supportive housing projects least likely to receive investor funds in the current market.
• Community Development Block Grant funds will be extended by $16 million.
• Through 2009, first time homebuyers can receive an $8,000 non-repayable tax credit if the buyer remains in their new home three years.
• Low-income and homeless Minnesotans can receive a total of $23.7 million in Emergency Shelter Grant assistance and $1.5 million for FEMA emergency food and shelter program.
In Mid-February, the Minnesota Housing Partnership released their “Housing as a Lever for Economic Recovery Report” that addressed the impact of housing construction and rehabilitation on spending, income, job creation and public revenue. It reveals that investment in housing stimulates substantial economic activity because every state dollar spent for housing construction attracts an additional six to seven federal and private sector dollars.
The bottom line: if Minnesota invests in the production of affordable homes with both the state and new federal funds, we can meet the needs of struggling families and create good jobs that stimulate the economy for the whole state.
Next month I plan to take my Housing Committee on a foreclosure tour to see first-hand the damage foreclosure has wreaked on families and neighborhoods in our communities. We will tour a suburb as well as an inner city neighborhood. I will update you on the details when we get closer to the tour date. Please feel free to call or write with any ideas or issues. I can be reached by phone at 651-296-0294, by mail at 471 State Office Building, 100 Martin Luther King Blvd., St. Paul, MN 55155 or by e-mail at email@example.com.
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