ST. PAUL — Minnesota’s housing shortage has hit areas outside the Twin Cities particularly hard, because low rents and high construction costs have limited developers’ profits and stalled projects.
Two bills heard in state House and Senate committees aim to expand housing-related infrastructure, including sewers and water lines, and support workforce housing through grants to cities and tribal nations.
The first bill, heard in a House committee on Wednesday, April 8, would allocate $20 million to the Workforce Housing Development Program, which helps Greater Minnesota communities build workforce rental housing in areas where employment is growing. The committee delayed action on the bill with the understanding that it could be a part of a larger housing-focused package of legislation.
The workforce housing program is available exclusively to smaller and mid-sized communities, with priority given to those with 30,000 or fewer residents.
Dante Tomassoni, the director of corporate affairs for Cirrus Aircraft in Duluth, said 35 people that Cirrus wanted to hire in recent years either declined or rescinded an offer because they couldn’t find a place to live.
Skip Duchesneau, president of housing developer D.W. Jones Management Inc., said the program has supported multiple projects throughout Greater Minnesota. Beyond adding housing, developments generate property tax revenue. One 65-unit development in Warroad generated more than $121,000 in property taxes in 2026.
“Those dollars are going back into the community every year, and they represent housing for teachers, health care workers and manufacturing employees in the community,” Duchesneau said.
The program has just $4 million available for applicants in 2026, Duchesneau said. The last allocation of $39 million in 2024 drew roughly twice as many requests as the program could fund.
A second bill, heard in a Senate committee on Tuesday, April 7, would allocate $15 million to the Greater Minnesota Housing Infrastructure Grant Program. The grants focus on developing public infrastructure, such as sewers and roads, necessary for housing development. The program last received $8 million in 2023, which funded less than half of the applications.
The bill would also expand eligible projects to include workforce housing. The proposal was set aside for possible inclusion in the 2026 bonding bill, the state's biennial infrastructure package.
Greg Lerud, Becker city administrator, said the city used a 2025 grant to extend water, sewer and streets across 17 acres of vacant land. The city is now working with two developers to build 268 housing units on the site.
“The grant was critical for the city to attract approximately $22 million of investment in our city for this needed housing,” Lerud said. “This in turn will support local businesses and the school system, strengthening the entire community.”
Both bills received bipartisan support. Final negotiations on the bonding bill and the housing-focused package of bills will likely happen in late April or early May, before the legislative session ends on May 18.
Rep. Roger Skraba, R-Ely, said in the House committee meeting that his conversations with developers on the Iron Range underscore the need for additional housing support.
“The developer says, ‘If I had a little more, I could do a little more,’” Skraba said. “We have an opportunity, maybe, to do that.”
Sen. Eric Pratt, R-Prior Lake, said in the Senate committee meeting that he would prefer the Minnesota Housing Finance Agency fund the infrastructure program with more than $136 million in interest that he said it has earned since 2023, rather than adding the expense to the bonding bill.
Rep. Matt Norris, DFL-Blaine, who authored the workforce housing bill, encouraged his colleagues to continue looking at how to direct funds toward housing in Greater Minnesota.
“Because when every community in Minnesota does better, it benefits our entire state,” Norris said.
Report for Minnesota is a project of the University of Minnesota’s Hubbard School of Journalism and Mass Communication to support local news across the state.
