This bill creates a new grant program in Minnesota to help counties, cities, and housing authorities build denser housing and support local economic growth. The state would provide up to 50 percent of the funding for site preparation and necessary public infrastructure, such as water, sewer, and street improvements, while local partners must cover the remaining costs. Grants are restricted to projects that address shortages of workforce or affordable housing and are explicitly excluded from single-family home developments. To receive funding, applicants must demonstrate that their projects will attract significant private investment, benefit the local economy, and hire local workers, with the state retaining the right to cancel grants if projects are not completed within five years.
This bill extends time limits for Columbia Heights' Alatus Tax Increment Financing (TIF) district, a tool to fund local development by capturing future property tax growth. It extends the initial five-year period to ten years and the subsequent use of tax increments to 11 years under state law. The city or its economic development authority may also choose to extend the TIF district's total duration by five additional years. These changes specifically apply to the Alatus TIF district in Columbia Heights and take effect after required local compliance with state procedures.
HF 112 modifies Minnesota's definitions for economic development funding. It expands "financial assistance" to include tax increment financing (TIF) for multifamily housing projects with 25+ units or $100,000+ in assistance, and low-income housing tax credits for projects with more than 10 units. The bill also broadens the definition of "project" to cover more public works developments financed partly by state funds. These changes affect developers, local governments, and state agencies administering economic development programs, effective August 1, 2025.
