Issue Briefing: Bonding for Emergency Shelter and Affordable Housing
The short version
Bonding bills are used to fund construction and infrastructure – roads and bridges, schools, government buildings and more. When legislators craft this Session’s bonding bill, they need to include significant funds for emergency shelter and affordable housing
The long version
State dollars for construction and renovation of emergency shelter and affordable housing are funded by the sale of bonds. The sale raises funds for the approved projects and the state pays off the bonds at a designated interest rate. Because these bond payments are made over a number of years, our state constitution requires that a bonding bill (also called a capital investment bill) must be passed by a three-fifths majority in both the House and Senate. Funds for housing are typically included as part of a larger bonding bill covering numerous projects ranging from roads and bridges to schools.
Minnesota has a dramatic shortage of emergency shelter. 80 of Minnesota’s 87 counties lack sufficient shelter beds. Too many people are sleeping in cars, in vans or outside. We need to preserve and expand our system of emergency shelter. The Minnesota Coalition for the Homeless determined that $100 Million in shelter capital would create or preserve over 2,000 shelter beds.
We also have a severe shortage of affordable housing. According to the Wilder study, 56% of homeless Minnesotans entered homelessness because they couldn’t afford their housing. Across Minnesota, approximately 2 of every 5 rental households are considered “cost burdened” – spending more than 30% of their household budget for rent. And 1 in 5 are “severely cost-burdened” with rent taking more than half their household income. You can see the data for your county here. County Fact Sheets - Joint Religious Legislative Coalition (JRLC) Site
Most new construction is market rate housing – well out of the price range of Minnesotans making 30-50% of the Area Median Income; these include people working in retail, hospitality
and personal care attendants as well as seniors or others living on a fixed income. Minnesota needs to fund affordable housing projects – and these happen through bonding.
The Minnesota Housing Partnership created this chart showing the breakdown of the housing that Minnesota needs compared to the actual housing being built. Sadly, you can see how little new construction addresses the housing needs of low and moderate-income Minnesotans.
These are statewide problems. In both of the last two sessions, bonding bills included funds for affordable housing, but not anywhere near the levels needed to address this need. Neither of those bills included funds for preservation or construction of emergency shelter.
- All across Minnesota we have a shortage of affordable housing and we are losing affordable housing faster than it is being replaced. Individuals, families and seniors cannot find an affordable place to live – and long-term stability.
- Shelter saves lives. We also need to invest in emergency shelter. Far too many Minnesotans don’t have a place to sleep. We need to do better.
- In this time of economic health, we have to invest in these basics - people need a place to sleep and a place to call home.
- Support significant investment in shelter and affordable housing in the bonding bill.