Metro Area Sales and Use Tax for Housing
The 2023 Minnesota Legislature approved a new Metro Area Sales and Use Tax for Housing for metro counties and cities. Tax revenues will fund the new Local Affordable Housing Aid (LAHA) program. The Legislature also approved a Statewide Affordable Housing Aid (SAHA) program funded through appropriations. Both programs aim to increase affordable housing production, prioritizing households with lowest incomes, reducing disparities in home ownership, reduce housing cost burden, housing instability, or homelessness, improving the habitability of homes, creating accessible housing, and creating more energy- or water-efficient homes.
LAHA and SAHA are estimated to generate $30 million a year for Hennepin County. The first funds from the new sales tax arrived in July 2024.
Hennepin County’s strategy
- Eviction prevention funding to continue the success of the COVID-era eviction prevention programs. It will provide help at housing court where it is needed most.
- Repair + Grow. A one-time initiative to build capacity of developers and owners to continue to create more affordable housing.
- Capitalizing services reserves for supportive housing projects to ensure sustainability of high-impact programs. This will fund wrap-around social services that residents need to be successful for the long-term.
- Working toward production, once developer capacity is restored. Expand the work of the Affordable Housing Incentive Fund to create and preserve affordable housing. This will also continue the pandemic-era “Affordable Housing Accelerator” fund to provide higher amounts to rush projects meeting county priorities.
- Advancing disparity reduction and climate impacts in homeownership creation and preservation.
These strategies support Hennepin County’s vision of:
- Reducing disparities in housing cost burden and homeownership
- Making homelessness rare, brief and nonrecurring.
These will be extra funds and won’t replace local funds for affordable housing.
Impact to date
Emergency Rental Assistance
In 2024, Metro Sales Tax funding was used to prevent 1,270 evictions through $5 million in emergency rental assistance delivered to low-income households at imminent risk for eviction. The assistance was administered through the County's centralized emergency rental assistance system (RentHelp Hennepin) and targeted to low-income households at heightened risk for eviction and homelessness, including families with minor children, seniors, and people with disabilities.
Repair + Grow
The one-time Repair + Grow program awarded $17.3 million to 9 non-profit affordable housing developer-owners with barriers to developing more housing due to the economic impacts of the pandemic. Recipients will use funding to rebuild stability across their affordable housing projects in Hennepin County, and to take on new development projects. Recipients will report on improved stability and production from 2025-2027.