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Proposal would use state bonds to boost manufactured home development parks

(CORRECTION/CLARIFICATION: Corrects attribution from Chris Sherman, president of Sherman Associates, to Rice County Commissioner Galen Malecha; clarifies that cooperatives do not operate as nonprofits)

REFILED April 12, 2024: Is manufactured housing an out-of-the-box solution to Minnesota’s housing shortage?

Rep. Kristi Pursell (DFL-Northfield) believes so. She is sponsoring HF3210, which, as amended, the House Housing Finance and Policy Committee laid over Tuesday for possible inclusion in larger legislation.

Rice County Commissioner Galen Malecha testifies before the House Housing Finance and Policy Committee in support of HF3210, sponsored by Rep. Kristi Pursell. (Photo by Michele Jokinen)

Under the bill, the Minnesota Housing Finance Agency would utilize $10 million in state bond proceeds to establish a pilot grant program. City and county recipients would receive matching funds to build manufactured home park infrastructure, such as sewers, water supply systems, streets, wastewater treatment systems, and stormwater management systems.

Pursell said the manufactured homes are built in Minnesota and are between 30% and 60% cheaper than site-built homes.

Housing park land is typically owned by a cooperative, Pursell said. According to the Star Tribune, manufactured homes owners typically pay rent for their housing lot, inclusive of water and garbage utilities.

In addition, manufactured homes can help create generational wealth, Pursell added. According to a fact sheet from Northcountry Cooperative Foundation, Minnesota has one of the worst racial gaps in home ownership in the nation.

Affordable manufactured housing could benefit senior citizens and veterans, said Rice County Commissioner Galen Malecha.

Under the bill, housing projects eligible to apply for the grant program may be single-family or multifamily housing developments and be either owner-occupied or a rental. Any given home park may also be eligible for homestead treatment under state law.

A county or city would receive no more than $60,000 per manufactured housing lot with no cap across years.

Rep. Brian Johnson (R-Cambridge) proposed limiting the amount to $30,000 to keep the program in line with other state housing initiatives, but no action was taken on that proposal.

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