Bill Wernz has contributed to an affordable housing nonprofit for decades, but when Canadian wildfires darkened the skies around his St. Paul senior apartment complex last summer, the 80-year-old semi-retired attorney felt called to do something about climate change as well.

Turning his thermostat to 56 degrees at night could only accomplish so much, so Wernz researched a way to marry his two charitable interests. He found the new Minnesota State Housing Tax Credit Program and Contribution Fund, which began late last year after bipartisan support in the Legislature.

The program, administered by Minnesota Housing, the state's housing finance agency, allows individual taxpayers and businesses to make donations to finance affordable housing projects throughout the state. Contributors who donate between $1,000 and $2 million for either an eligible affordable housing project or a general fund receive an 85% tax credit for their contribution.

Wernz cajoled fellow seniors at Marvella assisted living community in St. Paul to donate $165,000 to the program. Their money was used to install solar panels on two new affordable housing projects, one in St. Louis Park and the other in their Highland Park neighborhood.

"I know this is too big of a problem to make a big dent, but I wanted to do my bit," Wernz said. "Here's a carbon offset that's right there — you can see it."

The deadline to apply for this year's tax credit is Dec. 6. Contributions provide funding for loans for eligible housing projects, and the loans are funded entirely by taxpayer contributions, not state appropriations or other funding sources.

It's rare for a government fund to accept private donations. Minnesota is one of the first states in the country to begin a program like this one, which is modeled off a North Dakota housing tax credit program. Lawmakers have called the legislation revolutionary because it brings private investment to bear on an issue that cannot be solved by government.

"This is one of the most amazing pieces of legislation we've seen in a long time," said Chris Coleman, president and CEO of Twin Cities Habitat for Humanity and former mayor of St. Paul. "It's kind of mind-boggling because of the simplicity of it. This is a way to do good and help your tax burden as well. That's quite a two-fer."

Affordable housing is as big of an issue in the Twin Cities, where housing and rental costs have increased dramatically in the past decade, as in greater Minnesota, where limited availability of affordable housing is considered a central obstacle to economic development.

Minneapolis has one of the worst housing shortages in the country, according to a Zillow report earlier this year. And among economic development experts in greater Minnesota, it's almost become a cliche: The problem isn't a lack of rural or small-town jobs. It's a lack of places for workers to live.

"It doesn't matter where I travel in the state of Minnesota," said Minnesota Housing Commissioner Jennifer Ho. "Everyone everywhere is talking about the fact that housing is a challenge. And this [tax credit program] is a really concrete way for people to participate in investing in more homes. This is a way for those who are saying 'what can I do to help?' to have a really significant and tangible way to invest."

After it was passed by the Legislature, the six-year program launched in October 2023. Taxpayers contributed some $7 million last year, which went to 23 projects statewide. More than a third of the projects were in greater Minnesota, and the vast majority of those were in towns with fewer than 2,500 people.

Statewide, there's a shortage of more than 100,000 rental homes available for extremely low income renters, according to the National Low Income Housing Coalition. And a report by the Minnesota Housing Partnership indicated housing is unaffordable to half of the state's renters, the worst rate in the past decade.

After a press conference Monday, Paul Williams, the president and CEO of Project for Pride in Living, led a tour of a 60-unit affordable housing complex, mostly workforce housing, in St. Louis Park that will open next month. It's one of the two projects Wernz had raised $165,000 for to purchase solar panels through the tax credit program.

"This has a really tangible impact in a way that multiplies," Williams said. "We all deserve dignity, and housing stability translates into dignity."