A bipartisan group of Minnesota legislators is planning to introduce a flurry of bills this session aimed at making housing more affordable.

From loosening local zoning rules that limit density to reforming homeowners associations and curbing corporate ownership of multifamily buildings, the goal is to spur new construction and reduce consumer costs at a time when would-be buyers and renters across the state are struggling to find places to live.

"Housing is one aspect that we're seeing of this massive wealth gap problem that continues to get worse in our country," said Rep. Larry Kraft, DFL-St. Louis Park. "You hear at one level the economy's doing well, and then many folks look at that and say, 'You've got to be kidding me. How am I going to buy a house?'"

Minnesota is short more than 100,000 housing units — one of the biggest deficits in the nation — and existing housing is increasingly more expensive.

The median monthly rent statewide is $1,550, up $50 from a year ago. According to Minnesota Realtors, pending Twin Cities home sales under $300,000 dropped between December 2023 and December 2024, while sales at higher price points rose. The biggest leap by far was among pending sales upward of $800,000, which jumped more than 30%.

Elevated interest rates have sidelined many buyers and stalled new construction, buoying inflation even as prices in other areas recede. Though the Federal Reserve has cut rates from a 22-year high, the average 30-year fixed mortgage rate has topped 6% since 2022. Last week, the mortgage rate dipped below 7% after five weeks of increases.

Eyeing federal policy

Beyond the central bank, which is an independent government agency, federal decisionmaking has the potential to both help and hinder the housing shortage in Minnesota and nationwide.

The U.S. Department of Housing and Urban Development (HUD) implemented a range of efforts under former President Joe Biden, including building and repairing affordable housing units and making it easier to buy a home with an FHA-backed mortgage.

On Jan. 20, President Donald Trump issued an executive order directing the heads of executive departments and agencies "to deliver emergency price relief" to U.S. consumers, including taking steps to "lower the cost of housing and expand housing supply."

The National Association of Home Builders applauded the order, with Chair Carl Harris saying in a statement, "the only way out of this crisis is to remove barriers like unnecessary and costly regulations that are raising housing costs and preventing builders from building more attainable, affordable housing."

At the same time, proposed tariffs and immigration reforms under the Trump administration could make construction more expensive by increasing the costs of materials and labor.

"There is reason for concern," said Rep. Mike Howard, DFL-Richfield, who chaired a housing committee at the Capitol for the past two years. "It makes it all the more important that in Minnesota, we take action and pull every lever that's in our control, because our housing shortage is just going to get worse."

Bipartisan issue

Minnesota lawmakers have been working to ease the state's housing needs for years, including with a $1 billion investment in 2023. Last year, the Legislature approved allocating more funding for affordable housing, but a sweeping proposal to override local zoning codes — which historically have prioritized single-family zoning — failed amid local government opposition.

"A lot of cities do the right thing and do good work ... but we do need areas in every city where the density is probably a little smaller so we can build more affordable homes," said Sen. Rich Draheim, R-Madison Lake. "I don't like the heavy-handedness, but this is my ninth year of working on this, and we haven't gotten anywhere, so it might be time to be heavy-handed across the state."

Daniel Lightfoot, a lobbyist with the League of Minnesota Cities, said conversations with lawmakers since last session have focused on the organization's concerns about "one-size-fits-all" legislation that would limit local decision-making. Some communities, for example, don't have the infrastructure capacity to support more housing density, he said.

"I have not talked to a single city official that has not identified housing as a need in their community," Lightfoot said. "But that shortage looks different in individual communities."

Legislators plan to introduce several bills this session, rather than packaging proposals into a single, all-or-nothing measure. Unlike many issues before the Legislature — where a standoff between Democrats and Republicans in the House has stalled legislative business — housing affordability draws lawmakers together across geographic and party divides, said Rep. Jim Nash, R-Waconia.

"That speaks to the validity and the need to do this," he said.