Bonding flexibility for the homeless

The Minnesota Housing Finance Agency says it would have more flexibility to address long term homelessness needs under a bill laid over Feb. 19 by the House Housing Policy and Finance and Public Health Finance Division for possible inclusion in its bonding request.

HF2535, sponsored by Rep. John Benson (DFL-Minnetonka), would allow the agency to establish a nonprofit housing bond account within a housing development fund. The agency could then issue up to $30 million of nonprofit bonds in one or more series to make loans and to finance construction and rehabilitation of permanent supportive housing.

The housing would be used for individuals or families who have been without a permanent residence for at least 12 months or at least four times in the last three years. It would also apply to those who are at significant risk of being without a permanent residence.

The bill is the last request for state money in the plan that began in 2003, to end long term homelessness, said Tonja Orr, agency assistant commissioner for housing policy. The money would fund about 200-350 housing units, she said.

The agency has used general obligation bonds to fund housing since 1990, but state constitutional guidelines require units to be owned by a public entity. Finding a willing and able entity to own public housing has been a struggle partly because of more costly legal fees and extra construction elements in projects, Orr said. The bill’s financing mechanism will speed up development of affordable housing because nonprofits won’t have to negotiate with local units of government, she said.

Orr said project allocations would be based on communities identifying a need and asking the agency for help.

A companion bill, SF2311, sponsored by Sen. David Tomassoni (DFL-Chisholm), awaits action by the Senate Finance Committee.