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SF 5242

Statewide public infrastructure grant program establishment to support housing densification and economic development

2025-2026 Regular Session Introduced by Lindsey Port and 1 co-sponsor

Creates a statewide grant program covering up to 50% of eligible public infra and site costs to accelerate housing densification and economic development.

Referred to Jobs and Economic Development
#employmentandeconomicdevelopmentdepartment #housingandhousingfinanceagency
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Bill Summary · SF 5242

Summary of Bill SF 5242 (2025-2026) – Minnesota

Title

Statewide public infrastructure grant program establishment to support housing densification and economic development

Purpose and Intent

  • Create a statewide Public Infrastructure Grant Program to support housing densification, increase workforce or affordable housing, preserve or enhance jobs, and expand or create new economic development.
  • Provide grants to counties, housing and redevelopment authorities, or cities to cover up to 50% of certain project costs for eligible housing projects, with the remainder funded by nonstate sources.

Key Provisions

Subdivision 1. Grant program established; purpose

  • The Commissioner of the Minnesota Department of Employment and Economic Development (the “commissioner”) may award grants to:
    • Counties
    • Housing and Redevelopment Authorities (HRAs)
    • Cities
  • Grant coverage: up to 50% of eligible project costs, specifically: 1) Site preparation and redevelopment costs 2) Capital costs of necessary public infrastructure to support housing density
  • Recipients must cover the remaining project costs with cash or in-kind contributions (in-kind may include value from site prep and redevelopment not related to the public infrastructure).

Subdivision 1. (continued)

  • Purpose of grants: support housing densification, affordable/workforce housing, job retention/enhancement, and expansion or creation of new economic development.
  • Grant award decisions must follow criteria set in Subdivision 5.
  • If an award is less than 50%, the commissioner must provide a written explanation to the applicant and to the chairs and ranking minority members of the relevant budget/ economic development committees.

Subdivision 2. Definitions

  • City: any statutory or home rule charter city.
  • Housing and Redevelopment Authority: an authority established under chapter 469 or applicable special law.
  • Public infrastructure: publicly owned physical infrastructure necessary to support eligible housing projects, including:
    • Sewers
    • Water supply systems
    • Utility extensions
    • Streets
    • Wastewater treatment systems
    • Stormwater management systems
    • Facilities for pretreatment of wastewater to remove phosphorus
  • Other definitions align with the above to determine eligible entities and infrastructure.

Subdivision 3. Eligible housing projects

  • Eligible projects must be located in areas with:
    • Shortage of workforce housing, or
    • Shortage of affordable housing

Subdivision 4. Ineligible housing projects

  • Single-family residential dwelling development projects are not eligible for a grant under this section.

Subdivision 5. Application process

  • The commissioner must develop application forms and procedures.
  • Applications must include a governing body resolution certifying that at least 50% of project costs are committed from nonstate sources.
  • Evaluation criteria for complete applications: 1) The project is an eligible housing project (per Subdivision 3). 2) The project is expected to attract substantial public and private capital investment and provide substantial economic benefit to the locality. 3) The project will employ a local workforce.
  • The commissioner has discretion in awarding grants for a site, with decisions not generally subject to judicial review except for abuse of discretion.

Subdivision 6. Maximum grant amount

  • Each county, HRA, or city may receive up to a specified maximum grant amount over a two-year period for one or more projects. (Note: The exact dollar figure is redacted in the provided text as “$....…” and would be specified in the final enacted version.)

Subdivision 7. Cancellation of grant; return of grant money

  • If five years pass without timely project progress and completion appears unlikely, the commissioner must cancel the grant and require the grantee to return all grant funds awarded for the project.

Subdivision 8. Appropriation and reallocation

  • Funds returned to the commissioner from canceled grants are reappropriated to make additional grants under this section.

Procedural and Timeline Considerations

  • Referred to the Senate Jobs and Economic Development committee for consideration.
  • If a grant is awarded for less than 50%, an explanation must be provided to the recipient and to the appropriate legislative chairs/minorities.
  • Affected entities must secure at least 50% nonstate funding in their project proposals.
  • Grants are subject to a five-year performance/implementation window, after which cancellation and repayment can occur if progress stalls.
  • Any returned funds can be reallocated to fund additional grants under the program.

Who Is Affected

  • Local governments (counties, cities) and regional housing authorities (HRAs) engaged in housing development and infrastructure projects.
  • Communities experiencing shortages of workforce or affordable housing.
  • Local labor markets via a requirement that projects employ a local workforce.
  • Taxpayers and state budget staff, given the grant/appropriation framework and potential need for ongoing funding.

Potential Impact

  • Encourages housing densification by funding up to half of essential site/ infrastructure costs for eligible projects.
  • Promotes alignment of housing development with infrastructure readiness, potentially accelerating mixed-use or higher-density housing in targeted areas.
  • Increases collaboration between local governments and state funding mechanisms to attract public and private capital.
  • Provides accountability and time-bound expectations (five-year progress window) to ensure project timelines and use of funds.

Note: The exact maximum grant amount per recipient (Subdivision 6) is not specified in the provided text and would be defined in the enrolled version.

Compiled from official sources — confirm details with the bill’s official record.

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