The 2026 Legislative Session Comes to an End

Overall, it was an interesting year at the Capitol as nearly everyone on both sides of the aisle wanted the session to be budget neutral. Since 2026 is an off year for budgeting there was no requirement money be spent on anything, so it was an uphill battle for everyone looking for funding and housing was looking for a lot.

First, the best news from the session! After our own Jessie Hendel testified about the vital part Housing Infrastructure Bonds (HIBs) played in getting Kyle Garden Square built, the legislature passed, and Governor Walz signed, $100 million in new HIBs! This is a tremendous investment in the future of Minnesota’s affordable housing stock. We don’t want to say this happened purely because of Jessie’s testimony, but if you’ve heard Jessie’s passion for affordable housing, we know it helped. Thank you to everyone involved in this rousing success. (Note: As HIBs are bonds they remain budget neutral.)

Next, as mentioned in March, Governor Walz’s proposed supplemental budget included $33 million for supportive housing to help plug the forthcoming gap in Federal Continuum of Care (CoC) funding. This is a big part of the Sustain the Gain campaign Alliance has been working on with other housing providers.

Unfortunately, when both the House and Senate passed their budget bills, they did not include any money beyond the $9 million detailed in March for supportive housing. This was disappointing, but thanks to the Governor’s Office and our tremendous champions in the House and Senate, especially Representatives Michael Howard and Spencer Igo and Senator Lindsey Port, the final bill that was signed into law included another $4 million for supportive housing. Accordingly, the total amount to help Sustain the Gain this year is $13 million. This is a good step that will help the industry stave off the Federal funding cliff for now, but we are already hard at work on the campaign for 2027, a full budgeting year, to guarantee the future of supportive housing.

Other housing funding passed:

• $40 million for the Family Homeless Prevention Assistance Program. This program supports eviction prevention, rental assistance, rapid rehousing, and housing stabilization services. These funds will, among other things, help fill the rental assistance gap after Operation Metro Surge.
• $14.3 million for workforce housing in Greater Minnesota.
• $4 million for manufactured home infrastructure grants.
• $425,000 for statewide tenant education and hotline services.
• $150,000 for homeownership education.
• $150,000 for a Minnesota Nice Homeshare pilot program in St. Louis County.

Additionally, progress was made on the proposed Constitutional Amendment to create a sales tax increase to fund housing and a bill to change zoning rules to make it easier for affordable housing projects to move forward. As mentioned in March, Alliance is not actively working on either of these bills but does support them.

All in all, 2026 was a bit of an up and down year at the legislature, but there was absolutely more up than down. We look forward to continuing to work in 2027 and beyond to change the policies and systems at all levels that allow homelessness and housing insecurity to persist.

If you have any questions about Alliance’s policy work, don’t hesitate to contact Director of Development Craig Freeman at cfreeman@alliancempls.org or (612) 517-2323.