Park Plaza Cooperative President Natividad Seefeld testifies before the Minnesota House of Representatives Housing Committee on 2/8/23.
As the 2023 Minnesota legislative session wrapped up this week, many are calling it one for the history books. From universal free school lunch and breakfast to legalizing recreational marijuana, legislators moved at breakneck speed to pass a comprehensive budget and several major policy changes.
However, unfortunately like many of the communities themselves, one of the overlooked aspects of this session has been an unprecedented amount of funding and policy changes that will impact the lives of manufactured home owners across Minnesota. The over $35 million funding package includes the following:
$15 million increase in funding for the Manufactured Home Community Redevelopment Fund
Governor Tim Walz (DFL-St. Paul) signed into law a $15 million increase in funding for the Manufactured Home Community Redevelopment (MHCR) program at the Minnesota Housing Finance Agency (MHFA). Many resident-owned cooperatives (ROCs) have used this grant program to pay for critical infrastructure projects for their communities, including storm shelters, sewer replacement, and roads. Last year, the program awarded $9.5 million to manufactured housing communities across the state, with ROCs receiving $5.9 million, nearly two-thirds of the available funds. However, communities in Minnesota requested over $25 million in funding, showing a desperate need for additional resources. After this increase in funding, there will be $17 million available over the next two years for this program.
$10 million for the creation of manufactured home lending grants
The legislature and governor allocated $10 million in one-time funding for the creation of a new grant program that will lead to the development of innovative, affordable lending products that can be used by homeowners in resident-owned manufactured housing cooperatives. The competitive grant program will provide funding to lenders that will create loan products that:
Provide affordable interest rates to manufactured home owners for their home loan.
Provide down payment assistance to new manufactured home owners.
Provide assistance and affordable loans for the rehab of existing manufactured homes.
These new lending products will not only help existing and new cooperatives expand their communities, but also provide an affordable homeownership opportunity for Minnesotans. It is anticipated community lenders who receive these grants will leverage those dollars with outside resources, thereby making the state’s investment go even further. Once these lending products are created, it is expected they will be offered for years to come.
$10 million for the creation of a manufactured home park acquisition fund
The state legislature created a $10 million manufactured housing community acquisition fund that will be available to Minnesota residents of manufactured home parks to purchase their communities. Managed by NCF, the fund will be revolving, meaning residents would use it to buy their community, and then quickly pay the fund back so that other communities can use the fund. This should hopefully increase the number of resident-owned cooperatives and allow manufactured housing residents to compete in the marketplace against well financed out-of-state buyers.
$300k to the City of Northfield for infrastructure for a new manufactured home cooperative
Included within the Tax Bill passed by the legislature is a provision that allocates $300k to the City of Northfield to help offset the costs of municipal infrastructure for a new manufactured home cooperative in the city. NCF is currently in the process of developing a new manufactured home cooperative in Northfield. One of the costliest burdens for existing manufactured housing communities is the maintenance and upkeep of their privately owned infrastructure, such as roads, sewers, etc. A key feature of this new neighborhood will be city owned and managed infrastructure, thus eliminating a major financial hurdle for the cooperative homeowners. This ground-up development, featuring net-zero energy efficient homes, will be the first of its kind and will provide much needed affordable workforce homeownership for the residents of Northfield.
Tax-credit incentive for park owners to sell to residents
The governor signed into law a tax incentive for manufactured home park owners to sell to their residents (see Section 40. [290.0694] of the 2023 House tax bill). This tax credit would make it so that any owner who sold to their residents, instead of another buyer, would stand to make more money from the sale. This should be a valuable tool for residents when negotiating the sale with their community owner.
Notice of sale for manufactured homeowners
Often, manufactured home parks are sold without residents being advised beforehand. This creates uneasiness and instability in the lives of community residents. A new provision passed into law creates a notice that manufactured home park owners are required to provide to their residents if they are considering selling the community. The notice will require the park owner to tell residents the terms of the offer they are considering. It would also potentially allow the residents to organize and meet or exceed the offer that the owner is considering. In addition, the state government will receive the notice from the park owner, and they will have to inform organizations who work in cooperative ownership that a park is for sale.
As these new programs and policy changes are rolled out, stay turned for updates. However, there is hope that this historic funding package, combined with valuable policy changes, have better positioned Minnesota manufactured home owners for the future.
