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MINNEAPOLIMEDIA NEWS | More Than $400 Million Collected for Twin Cities Housing as Rental Assistance Reaches Few Families and Construction Lags
An investigation into Minnesota's metropolitan housing sales tax reveals a widening gap between money collected and assistance delivered. With the Metropolitan Council's housing authority receiving $30 million but housing only eight families so far, questions are mounting about implementation, accountability and whether the program can meet its original goals.
ST. PAUL, MN (November 9, 2026).
More than $400 million has been collected through a Twin Cities metropolitan sales tax intended to address Minnesota's housing shortage, but much of the promised assistance has yet to reach the families it was designed to help. An investigation published Sunday by the Minnesota Star Tribune found that rental assistance programs are only beginning to operate, affordable housing construction remains years away in many communities, and rising rents are forcing officials to reconsider how many households the funding can realistically support.
The findings raise significant questions about the implementation of one of Minnesota's most ambitious recent housing investments. In 2023, state lawmakers approved a historic housing package totaling approximately $1 billion, including a new metropolitan sales tax intended to support affordable housing development, rental assistance and other local housing initiatives. Three years later, the tax has generated substantial revenue, but the pace at which that money is producing measurable housing outcomes remains uneven.
For residents of Anoka and Hennepin counties, including Coon Rapids, Brooklyn Park and surrounding communities, the issue is particularly relevant because the Metropolitan Council Housing and Redevelopment Authority serves portions of both counties. The authority received $30 million in state rental assistance funding earlier this year, but the investigation found that only eight families had been housed through the new program at the time of reporting.
The authority hopes eventually to assist approximately 900 households. Reaching that goal will require an expansion far beyond the program's initial results, along with enough participating landlords and available rental units to accommodate families receiving assistance.
A Historic Housing Investment Meets the Reality of Implementation
Minnesota's housing legislation was designed to address a problem that has grown increasingly difficult for households across the state. Rising rents, limited supplies of affordable homes and persistent housing instability have left many families struggling to secure accommodation within their means.
The metropolitan sales tax was intended to create a sustained source of funding rather than relying entirely on periodic legislative appropriations. Revenue from the tax supports several purposes, including rental assistance, housing development, homelessness prevention and locally administered housing programs.
The sales tax generally applies at a rate of one-quarter of one percent in the seven-county metropolitan area. Its proceeds are distributed through different channels, including state-administered programs and allocations to local governments.
That structure helps explain why the collection of more than $400 million does not mean the entire amount was available for immediate rental vouchers. The money supports multiple programs with different eligibility requirements, implementation schedules and objectives.
Nevertheless, the scale of the revenue makes the pace of delivery an important matter of public accountability. Residents paying the tax have a legitimate interest in knowing how much money has been committed, how much has actually been spent and what measurable housing outcomes have resulted.
Metropolitan Council Receives $30 Million, Houses Eight Families
Among the findings drawing attention is the performance of the Metropolitan Council's housing authority, which received $30 million to administer rental assistance.
The authority serves broad portions of Hennepin, Ramsey, Anoka and Carver counties. Its eventual goal is to support approximately 900 households, but only eight had been housed through the new program when the investigation was published.
Terri Smith, the authority's director, told the Minnesota Star Tribune that establishing a new rental assistance program requires careful preparation. Administrators must hire personnel, develop operating procedures, establish relationships with participating organizations and ensure that recipients can successfully use the assistance.
The authority described the funding as the largest single allocation it has received for this purpose.
Those explanations provide important context. A new program cannot necessarily distribute tens of millions of dollars immediately without eligibility reviews, payment systems, landlord participation and fraud safeguards.
At the same time, the difference between eight families housed and a goal of approximately 900 households is substantial. It underscores the need for clear milestones showing when assistance will reach more residents and how officials intend to address obstacles that could slow progress.
A Voucher Does Not Guarantee a Home
The challenge extends beyond issuing rental assistance vouchers.
Families receiving subsidies must still locate suitable rental housing and find landlords willing to participate in the program. In a competitive rental market, that process can be difficult even when a household has financial assistance available.
The Minneapolis Public Housing Authority, another recipient of state rental assistance funding, began accepting applications in mid-October. According to the investigation, applications quickly exceeded the available waiting-list spaces by approximately three to one.
The agency expects eventually to help more than 600 households, but administrators acknowledged that finding participating landlords remains a significant challenge.
The state's rental assistance program also differs from the federal Housing Choice Voucher program, commonly called Section 8. State-funded vouchers generally must be used within the jurisdiction where they are issued, limiting geographic flexibility.
Eligibility is directed toward extremely low-income households with children. A family of four earning approximately $40,000 annually or less may fall within the income range described in the reporting, although actual eligibility depends on the applicable program rules.
For a family facing eviction or living in unstable housing, the difference between receiving a voucher and securing an apartment is not administrative. It can determine whether that family obtains stable accommodation.
Anoka County's Spending Raises a Different Question
The investigation also identified an important distinction between housing assistance and housing production in Anoka County.
Tonja West-Hafner, the county's community and government relations director, said Anoka County has used some of its housing sales tax revenue for homelessness prevention and to support construction projects in Columbia Heights and Blaine.
Those investments address different parts of the housing problem. Homelessness prevention can help residents remain housed, while construction financing can increase the number of available units over time.
However, West-Hafner also acknowledged that some cities have used their allocations to expand existing programs, including home energy-efficiency improvements and property rehabilitation initiatives.
Such programs may improve housing conditions and help homeowners maintain their properties, but they do not necessarily increase the number of homes available.
That distinction is critical in a region confronting a shortage of affordable units. Preserving existing housing can be valuable, but it is not equivalent to creating additional housing capacity.
For Coon Rapids, Brooklyn Park and other Northwest Metro communities, the reporting creates an opportunity to examine how individual cities have allocated their housing sales tax revenue. Residents should be able to determine whether local funding has supported new construction, rental assistance, homelessness prevention, home rehabilitation or other activities.
The investigation does not establish that either Coon Rapids or Brooklyn Park improperly spent its allocation. A city-by-city assessment would require reviewing municipal financial records and identifying the projects supported by the tax.
Some Communities Are Using Funds for Existing Housing Improvements
The Minnesota Star Tribune identified several examples illustrating the flexibility local governments have in spending their allocations.
Bloomington has supported condominium rehabilitation, Plymouth has invested in townhouse renovations, and Eagan has funded activities including homeowner improvements, radon mitigation and rental assistance.
Hennepin County has directed money toward emergency rental assistance, homeless shelter operations and nonprofit housing developers facing financial difficulties.
These expenditures can serve legitimate housing needs, especially where deteriorating properties or financial instability threaten existing housing.
The central policy question is whether the combined spending is producing the outcomes lawmakers and taxpayers expected when the sales tax was approved.
A program designed to address a housing shortage must eventually be evaluated not only by how much money it distributes, but also by how many families obtain stable housing, how many affordable units are preserved and how many new homes become available.
Without consistent reporting across jurisdictions, it can be difficult to determine whether the investment is achieving those goals.
Rising Rents Threaten the Original Voucher Goal
Another significant finding concerns the number of households the state expects to assist.
The rental assistance initiative was initially associated with a goal of reaching more than 5,000 families statewide. Officials now acknowledge that rising rents may prevent the available funding from stretching far enough to achieve that projection.
When rents increase, a fixed amount of assistance supports fewer households unless funding rises proportionately.
That reality creates difficult decisions for administrators. They may have to choose between assisting fewer families with larger subsidies or attempting to stretch assistance across more households with smaller payments.
The problem also demonstrates why rental assistance and housing construction must be considered together. Subsidies can help families afford existing apartments, but they do not automatically increase the number of available units. If housing supply remains constrained, rental costs may continue to place pressure on assistance budgets.
State Officials Defend the Careful Rollout
Minnesota Housing Commissioner Jennifer Ho defended the pace of implementation, noting that the 2023 legislation created numerous programs requiring new administrative systems.
Ho also emphasized the importance of financial controls amid heightened scrutiny of fraud involving public programs.
That concern is not insignificant. Housing assistance involves public money, eligibility determinations and payments to participating landlords or organizations. Poorly designed controls could expose the program to misuse.
However, safeguards and timely delivery are not mutually exclusive goals. Effective administration requires both protecting public funds and ensuring that eligible households receive assistance within a reasonable period.
The investigation also reported that Rep. Michael Howard, a Richfield Democrat who helped advance the housing sales tax, has expressed frustration with the pace of delivery and concerns that distributing money among numerous smaller jurisdictions may dilute its impact.
Howard has questioned whether additional restrictions should apply to communities that receive housing funds while limiting new residential construction.
Those concerns point toward a broader legislative debate over how much discretion local governments should retain and whether the state should establish stronger expectations for housing production.
The Accountability Questions Ahead
As Minnesota prepares for a new legislative session and a change in gubernatorial leadership, the housing sales tax is likely to remain an important subject for oversight.
Several questions deserve clear answers. How much of the more than $400 million collected has been spent? How many households have actually obtained housing through rental assistance? How many affordable units have been completed, rather than merely proposed or financed? How are local governments measuring the outcomes of rehabilitation and homelessness prevention programs?
For Anoka County and Hennepin County residents, the next stage of reporting should include a detailed examination of allocations to individual cities and the measurable results associated with those expenditures.
It is also important to distinguish between delayed spending and ineffective spending. Housing construction often requires years of planning, financing and permitting before residents can move into completed units. A project that has not yet opened may still represent a legitimate investment.
But the existence of long development timelines does not eliminate the need for transparent milestones, realistic projections and public reporting.
THE TAKEAWAY
Minnesota's metropolitan housing sales tax has generated more than $400 million, demonstrating the scale of public resources committed to addressing the region's housing shortage. Yet the initial results of rental assistance programs reveal a substantial gap between available funding and families actually housed.
The Metropolitan Council's housing authority has received $30 million but assisted only eight families so far, against an eventual goal of approximately 900 households. Meanwhile, some local governments are using their allocations for rehabilitation and preservation activities that may improve existing housing without increasing the overall supply.
The findings do not establish that the entire program has failed. They do establish that its effectiveness cannot be measured by revenue collection alone.
For Minnesota residents, especially families struggling to afford housing in Anoka and Hennepin counties, the central question is whether the state and local governments can turn a historic financial investment into timely, measurable and lasting housing stability.
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