Lawmakers advance $10 million plan to cover supportive housing funding gaps

Disruptions in federal funding have created what Rep. Michael Howard (DFL-Richfield) calls a “five-alarm crisis” that could leave vulnerable Minnesotans without housing.

In response, Howard sponsors HF3425 to redirect already-appropriated state dollars to supportive housing services that provide rental assistance and support services for people with complex needs, such as health challenges or addiction issues.

The House Housing Finance and Policy Committee approved the bill on a voice vote Wednesday, sending it to the House Ways and Means Committee.

Rep. Michael Howard

As twice amended, it would allocate $10 million for supportive housing, with $9 million directed to 2024 U.S. Department of Housing and Urban Development Continuum of Care grantees facing potential funding gaps.

Before hearing the bill, lawmakers were given an overview of supportive housing programs in Minnesota. Since 1994, such programs have received federal support through HUD Continuum of Care Grants. However, Fiscal Year 2025 notice of funding opportunities has been rescinded, leaving funding in limbo.

The programs have proven to prevent homelessness and provide pathways out of it, Howard said.

Emergency funds would be especially critical in Greater Minnesota, where funding sources other than the federal government are scarce. If grantees can’t keep doors open, he said, the people in the programs will have no other place to go.

Rep. Spencer Igo (R-Wabana Township) told a personal story in support of the bill.

He was on a ride-along with police in Grand Rapids that was quiet at first but ended with a commotion at the docks where a woman tried to drown herself. He was struck that everyone — sheriff’s deputies, emergency room staff, police officers — knew the woman’s name because she has continuous mental health crises.

“Why do I tell this story now? Because without continuum of care services this person is back on the street and back in harm’s way.”

He said it is a good bill because the Legislature can provide help when needed, adding he hoped the funding issues could get fixed at the federal level, possibly with state and congressional leaders helping to educate HUD officials on the need.