House Housing Committee Advances Tax Credit Changes To Support Greater Minnesota Housing Needs

The League-supported bill would expand the State Housing Tax Credit to better support market-rate workforce housing projects in Greater Minnesota.

On Feb. 19, the House Housing Finance and Policy Committee heard HF 1067, (Rep. Jeff Dotseth, R-Silver Township), and advanced the bill to the House Taxes Committee for consideration.

The bill seeks to better align the State Housing Tax Credit Program and Contribution Fund more closely with Greater Minnesota’s housing needs by waiving income limitations for certain projects.

Bill details

Currently, the program allows taxpayers and businesses to receive an 85% tax credit in exchange for contributions to support housing development. This bill would expand eligibility to projects under the workforce housing development program, making them eligible for grants and loans from the housing tax credit contribution fund.

The change would provide Greater Minnesota developers with another financing tool to help support market-rate workforce housing development while offering businesses more certainty in supporting individual projects that drive job creation, business expansion, and local economic development.

Support and next steps

The League provided testimony in support of the bill along with the Minnesota Housing Partnership, Skip Duchesneau (developer with D.W. Jones Management), and Mark Borseth (former City of Thief River Falls public works director and current director of Digi-Key Corporate Facilities).

The Senate companion of the bill will be introduced in the coming weeks and will likely be referred to the Senate Housing and Homelessness Prevention Committee for consideration.

LMC staff take

There are far fewer programs available to Greater Minnesota cities and their developer partners that focus specifically on market-rate workforce housing, which is a critical need in many communities. This bill would:  

• Provide another tool for developers and to attract private investment.
• Help state dollars go further in supporting housing projects.
• Address committee members’ interest in providing a boost in available resources for the program. In 2024, the full $9.9 million in available tax credits were used.

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