Minneslate Logo

SF1652 (Legislative Session 94 (2025-2026))

Certain low-income rental projects receiving low-income housing tax credits rent increase limitation provision

Related bill: HF1605

AI Generated Summary

Purpose

To limit rent increases for certain affordable rental units. Specifically, the bill sets a cap on how much rent can rise in 12 months for rent-restricted units in senior-only projects that receive low-income housing tax credits.

Main Provisions

  • Adds a new subdivision (Subd. 5) to Minnesota Statutes 462A.222 to establish a Limitation on rental increases.
  • Applies to any project that
    • is restricted to seniors (as defined in section 462A.37, subdivision 1, paragraph h), and
    • receives low-income housing tax credits (LIHTC) under section 42 of the Internal Revenue Code.
  • For each rent-restricted unit in such a project, the rent increase in any 12-month period may not exceed the greater of:
    • the percentage increase in Social Security or Supplemental Security Income (SSI) benefits in the preceding 12 months, minus one percentage point, or
    • 0 percent.
  • In other words, the annual rent increase cap is max(0, COLAincreaselast12months − 1%).

How it Works (Rent Increase cap)

  • If Social Security/SSI benefits rose by, for example, 3% in the last year, the cap would be 2%.
  • If benefits rose by 0% in the last year, the cap would be 0% (no increase allowed).
  • If benefits rose by 1%, the cap would be 0% (since 1% − 1% = 0%, and the floor is 0%).

Scope and Applicability

  • Targets only senior-restricted rental projects that receive LIHTC.
  • Does not apply to non-senior housing or to LIHTC projects without senior restrictions.

Effect on Income and Law

  • Creates a new binding limit on rent increases for the specified units.
  • Represents a change to existing law by adding a dedicated rent increase cap tied to federal COLA-related adjustments for Social Security and SSI.

Significance

  • Aligns rent increases for certain affordable senior units with changes in federal benefit programs, providing predictable housing costs for seniors in LIHTC properties.

Relevant Terms - Subd. 5, Limitation on rental increases - Minnesota Statutes 462A.222 - low-income housing tax credits (LIHTC) - section 42 of the Internal Revenue Code - senior-restricted housing / projects restricted to seniors - rent-restricted unit - Social Security (COLA) increases - Supplemental Security Income (SSI) - cost-of-living adjustment (COLA) - 12-month period - rent increase cap - zero percent (0%) floor

Bill text versions

Past committee meetings

Actions

DateChamberWhereTypeNameCommittee Name
February 20, 2025SenateActionIntroduction and first reading
February 20, 2025SenateActionReferred toHousing and Homelessness Prevention
March 06, 2025SenateActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Subd.5 Limitation on rental increases."
      ],
      "removed": [],
      "summary": "Adds Subdivision 5 (Limitation on rental increases) to Minnesota Statutes, section 462A.222, applying to projects restricted to seniors (as defined in 462A.37 Subd.1 para. h) that receive low-income housing tax credits under 26 U.S.C. § 42. The rent in any rent-restricted unit may not increase in a 12-month period by the greater of (a) the percentage increase in Social Security or SSI benefits in the preceding 12 months minus 1 percentage point, or (b) 0%).",
      "modified": [
        "Amends Minn. Stat. 462A.222 by adding Subd.5 to apply rent increase cap to LIHTC seniors' projects."
      ]
    },
    "citation": "462A.222",
    "subdivision": "Subd.5"
  },
  {
    "analysis": {
      "added": [
        "Uses 462A.37 Subd.1, par. h to define seniors for this measure."
      ],
      "removed": [],
      "summary": "References the definition of 'seniors' as defined in 462A.37 Subd.1, paragraph h to determine applicability of the new rent-increase limitation.",
      "modified": [
        "Cross-reference to seniors definition included."
      ]
    },
    "citation": "462A.37",
    "subdivision": "Subd.1, paragraph h"
  },
  {
    "analysis": {
      "added": [
        "References LIHTC under 26 U.S.C. § 42."
      ],
      "removed": [],
      "summary": "The bill references the Low-Income Housing Tax Credit under Section 42 of the Internal Revenue Code, as the LIHTC program delivered via 26 U.S.C. § 42.",
      "modified": [
        "Not modifying statute; simply referencing existing federal law."
      ]
    },
    "citation": "26 U.S.C. § 42",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "References 42 U.S.C. § 415i."
      ],
      "removed": [],
      "summary": "The bill uses the 12-month change in Social Security benefits as a benchmark for rent increases via 42 U.S.C. § 415i.",
      "modified": [
        "Not modifying federal statute; merely referencing it."
      ]
    },
    "citation": "42 U.S.C. § 415i",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "References 42 U.S.C. § 1382f."
      ],
      "removed": [],
      "summary": "The bill uses 42 U.S.C. § 1382f in conjunction with § 415i to determine the Social Security/SSI-based adjustment for rent increases.",
      "modified": [
        "Not modifying federal statute; solely referencing it."
      ]
    },
    "citation": "42 U.S.C. § 1382f",
    "subdivision": ""
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

Loading…