2025 Legislative Session Summary

Earlier this month, the state legislature wrapped up a chaotic and at times divisive legislative session, finalizing the budget in an overnight special session. You may have heard a bit more about the legislature than you’re used to, with the House split 67-67 between DFL and GOP, a razor-thin DFL majority in the Senate, rocky start to the session, and projected $6 billion deficit projected for FY28-29, there was a lot going on.   

Despite these challenges, throughout the turbulent session, Alliance staff and residents worked alongside our partners to champion affordable housing in both Minneapolis and across the state.  

In February, Alliance Executive Director Jessie Hendel testified before the Senate Housing and Homelessness Prevention Committee, sharing insights from her work on the Task Force on Long-Term Sustainability of Affordable Housing. Her testimony highlighted the critical need for sustained investment in affordable housing development and preservation. 

Also in February, Alliance resident Tyrone Shields brought a powerful personal perspective to the same committee, sharing his lived experiences to help advocate for an additional $400 million in Housing Infrastructure Bonds (HIBs). As one of Minnesota's largest and most flexible funding sources for affordable housing, HIBs are essential to Alliance's work developing new properties that serve families and individuals in Minneapolis. 

While the full $400 million in Housing Infrastructure Bonds didn’t make it in the final budget, lawmakers did authorize $50 million in new bonds, a significant win that will provide crucial capital for affordable housing development. This funding directly supports organizations like Alliance in creating more homes for those left out of market rate housing opportunities.  

The final budget also includes $8.4 million for the Family Homeless Prevention and Assistance Program, part of an $18.4 million increase in existing housing funding levels. These investments help prevent homelessness and provide critical support services that keep families stably housed. 

Beyond funding, the session produced several policy improvements that will enhance our ability to create affordable housing. New clarifications around securing funding for adaptive reuse projects, like Alliance's newest property, Kyle Garden Square, will open new possibilities for transforming existing buildings into quality affordable homes. 

While this session's results represent meaningful progress, significant work remains to close Minnesota's affordable housing gap. The good news? This session allowed organizations like Alliance and our peers to share the challenges facing the affordable housing industry in Minnesota through task forces and testimony. Lawmakers responded, at least in part, with bipartisan support and understanding of the vital role affordable housing plays in our communities. This provides a foundation for continued advocacy and investment in the years ahead. 

For more detailed information about this year's housing-related budget impacts, Minnesota Housing has published a comprehensive session summary.