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.
- Funding on-site supportive services at selected properties financed with Supportive Housing Strategy capital funding.
- Supporting housing-focused emergency shelter operations for singles, youth, and families experiencing homelessness.
- Starting in 2026, provide capital funding to incent the creation of new affordable housing, expanding the work of the Affordable Housing Incentive Fund and other existing capital sources.
- In the future, re-establish the pandemic-era “Affordable Housing Accelerator” fund to provide higher amounts to rush projects meeting county priorities, and advance 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.
The Metro Area Sales and Use Tax funds are intended to supplement local funding for affordable housing and will not replace that funding.
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 have used this funding to contribute to stability across their affordable housing properties in Hennepin County, and to take on new development projects. Recipients will report on improved stability and production from 2025-2027.
Required Local Affordable Housing Aid Certification
As a condition of receiving housing aid funds from the State of Minnesota, Hennepin County must commit to using housing aid funds to supplement, not supplant, existing locally funded housing expenditures, so that Hennepin County is using the funds to create new or to expand existing housing programs. Between 2023 and 2024, Hennepin County reduced its expenditure on rental assistance by $14,873. The reason for this reduced expenditure is that one of the properties in the Single Room Occupancy program was sold as a planned phase-out, which reduced subsidy expenditures.