A Primer on Housing Programs

Riverside Plaza in Minneapolis. Img. via Wikipedia.

Riverside Plaza in Minneapolis. Img. via Wikipedia.

After reading two recent articles on streets.mn about housing issues, along with recent articles in MinnPost, and articles on Citylab about the cost of public housing, it seemed that a primer on housing programs might be helpful. While the capable readers and writers from streets.mn would not confuse public housing with Section 8 or other programs, I have seen the terms used interchangeably on other sites. Let’s get them straight!

This is not an exhaustive list. The Minnesota Department of Human Services identifies 30 different housing programs within its own agency, most of which are very small programs serving a select group of people such as those exiting a specific facility. These are the largest ones or the most mainstream that serve a broad group of people. Each program could probably have its own article and reams of policy are associated with each. This is a primer, but I have provided links for each if you would like to find out all the minutiae.

Section 42

What is it? Section 42 is a section of the Tax Credit Reform Act of 1986 which created the Low Income Housing Tax Credit Program. It refers to the section of the law under the Internal Revenue Code. It provides tax credits to housing developers for keeping units affordable for a specific time period. To receive the tax credit developers must reserve no less than 20 percent of units for tenants with incomes 50 percent or less of the Metropolitan Statistical Area (MSA) median household income or no less than 40 percent of units for tenants with incomes of less than 60 percent of the MSA median household income. There are a bunch of other Section numbers that operate similarly, but for specific populations such as elderly tenants, rural areas, or tenants with disabilities. Rent cannot exceed 30 percent of a tenant’s income.

Who qualifies? It depends on the tax credit the developer applied for, but generally people with incomes less than 60 percent of an MSA’s median household income.

Who funds it? This is a federal tax credit.

What else? This is invisible, meaning that no one, including your neighbors has to know you have a lease in that building because it is Section 42 funded. This can increase mixed income housing, which is typically a goal of governments and housing advocates. On the other hand, it is not well understood and it can be difficult to know which buildings have these units. Also, it is unit-based, meaning if the tenant moves they lose the subsidy.

Public Housing


Public housing in Saint Paul. Img. Bill Lindeke.

What is it? Public housing are government-owned buildings where all tenants have to be below either 30, 50, or 80 percent of the MSA median household income, depending on the project. Think about Horn Towers or Mount Airy.

Who qualifies? People with income below 30, 50, or 80 percent of the MSA median household income. There are buildings for specific populations such as the elderly, people with disabilities, American Indians (Little Earth Housing in Minneapolis is an example), or others.

Who funds it? Federal government under the U.S. Department of Housing and Urban Development.

What else? These types of buildings have fallen out of favor and scattered site housing has become more popular based upon concerns of the effects of concentrated poverty. Also, this is very visible and can be stigmatizing for residents. There are typically long waiting lists and restrictions that exclude potential tenants with criminal records. The subsidy is attached to the unit so if someone needs to move they lose the subsidy.

Section 8 Voucher

What is it? Section 8 Vouchers are vouchers that allow tenants to find private market rentals and the local Housing Authority makes up the different between that household’s income and the market rate rent. Tenants pay between 30 and 40 percent of their income toward rent. There are restrictions on the maximum subsidy which can limit the availability of units.

Who qualifies? Same as public housing. There are special vouchers for special populations such as homeless families, people with disabilities, and the elderly.

Who funds it? Federal government under the U.S. Department of Housing and Urban Development.

What else? It can be difficult to find landlords willing to accept the vouchers. Not only because some landlords think Section 8 is a flag for a trouble tenant, but also because the program requirements can be seen as cumbersome by landlords. The subsidy is attached to the person so if they need to move and can find another landlord to accept their voucher, households can move. Currently, 16 of the Twin Cities housing authorities have closed waiting lists and six have open waiting lists, some for only specific groups. The waiting list can be a decade long.

Permanent or Transitional Supportive Housing

What is it? Permanent or Transitional Supportive Housing are units or buildings funded with Minnesota Housing Capital Funds or Operating Subsidies that provide housing with supportive services. Supportive services vary by the contract but can include case management, parenting support, transportation, medication monitoring, financial planning and budgeting, support groups, or social activities. There is a lot of variation in what these buildings look like and what they offer. Some are entire buildings, some are single units within a building, and others are more like facilities and offer congregate living. Transitional programs are for 24 months or less. Permanent are permanent.

Who qualifies? Households experiencing long-term homelessness, which is lacking a permanent place to live continuously for one year or more or at least four episodes of homelessness in the last three years.

Who funds it? The state through the Minnesota Housing Finance Agency.

What else? Supportive housing is a big component of Minnesota’s Plan to Prevent and End Homelessness. The state has invested $71 million in these programs in the last two years. These programs serve people who cannot maintain housing without support. More of these programs take a Housing First approach. Housing First is the idea that without housing people cannot make progress in other areas of their life. In the past, people were required to meet certain guidelines for housing, like maintaining sobriety. Now, Housing First focuses on housing people first and then helping them with the issues that led to homelessness.

Emergency Assistance and Emergency General Assistance

What is it? Emergency Assistance (EA) and Emergency General Assistance (EGA) is a cash grant that can be used once in a 12-month period to help with emergency basic needs like an eviction, damage deposit, or utility shut-off. EA can fund a rent subsidy of 75 percent for up to four months. Statewide more than 80 percent of EA and EGA money is spent on housing-related issues.

Who qualifies? EA is for families with children or pregnant women who meet the eligibility criteria for the Minnesota Family Investment Program (MFIP). EGA is for singles and married couples without children who are not on MFIP and have incomes less than 200 percent of the Federal Poverty Guideline (FPG).

Who funds it? The state through the Minnesota Department of Human Services and, for EGA, the county human service departments.

What else? Each county defines what an emergency is. Typically, the grant must be able to resolve the emergency. For example, if someone is being evicted from an apartment with rent of $800 and their income is $600 a month, EA or EGA will be denied because the apartment is not affordable. EGA is dependent on availability of funds. Each county receives a set amount from the state and when the money is gone, no more grants are made. There is a lot of variability in EGA from county to county, from eligibility, definition of an emergency, and maximum grant amounts.

Group Residential Housing

Emanuel 3 Supportive Housing. Img. RS Eden.What is it? Group Residential Housing is room and board for seniors and adults with disabilities in a licensed or registered setting which can include adult foster homes, board and lodging facilities, or supervised living facilities. Counties and tribal nations contract with sites licensed by the Minnesota Department of Human Services or the Minnesota Department of Health. Residents pay 30 percent of their income and the state pays the difference up to $891 per month, plus additional fees for services (Supplemental Service Rate).

Who qualifies? Adults and seniors with a disability that meets the criteria of the Social Security Administration. They must have income under $1,090 for disabled adults or $1,820 for blind adults and meet at asset limit of $2,000 for single people or $3,000 for a married couple.

Who funds it? The state through the Minnesota Department of Human Services.

Minnesota Supplemental Aid – Housing Assistance

What is it? Minnesota Supplemental Aid (MSA) is a $200 per month income supplement for people receiving or eligible for Supplemental Security Disability Income who pay more than 40 percent of their income toward housing.

Who qualifies? People receiving or eligible for Supplemental Security Disability Income, under age 65, who are either exiting certain institutions, eligible for a Medical Assistance waiver for community-based services, or be eligible for Personal Care Attendant services through Medical Assistance.

Who funds it? The state through the Minnesota Department of Human Services.

What else? This is a very under-utilized program. About 30,000 people in Minnesota receive MSA, but less than 1,000 people use the Housing Assistance grant. Many more qualify.

Homeless Shelters

Dorothy Day Center, Saint Paul. Img. Minnpost.

Dorothy Day Center, Saint Paul. Img. Minnpost.

What is it? Homeless shelters are buildings where homeless families or individuals can receive temporary shelter. Shelters are a mixed bag. Some offer shelter for up to 90 days while others have lotteries for a single night. Some offer an efficiency apartment others just a mat on the floor. Some are for families, others for single men or single women. Rural areas without shelters will often voucher homeless families into a motel. Some offer lots of other supportive services and others just a warm place for the night.

Who qualifies? Homeless people, however individual shelters serve specific populations like women with children or single men.

Who funds it? Shelters have a mishmash of funding. The U.S. Department of Housing and Urban Development, the state, counties, philanthropic organizations, and others provide funding.

What else? Accessing homeless shelters depends on the county. In Ramsey and Hennepin Counties families can call United Way’s 211 for shelter intake. The waiting list is longer than a month for family shelter. If a family receives a call for a shelter opening they must call back within two hours or they lose their spot. Singles in Ramsey County can contact the Dorothy Day Center and in Hennepin County contact St. Stephen’s.

There you go! Now you know the tip of the iceberg when it comes to housing programs and will never confuse public housing with Section 8 ever again.

Dana DeMaster

About Dana DeMaster

Dana DeMaster, MPP, is a program evaluator and researcher for human services programs who lives and bikes in Saint Paul. When she’s not analyzing data, she can be found rabble-rousing for neighborhood bike improvements in Saint Paul, playing Legos with her two children, or sewing practical things. You can find some of her other writing on the Grease Rag and Wrench blog.

23 thoughts on “A Primer on Housing Programs

  1. Adam MillerAdam Miller

    Helpful, thanks!

    My grandmother used to live in the building in the picture in St. Paul (more than 20 years ago now). I never realized it was public housing.

  2. Matthew Lewis

    Great article, Dana! It took me a long time to get this level of understanding of housing and it’s my job. I wish I’d had a resource like this when I was starting out. The only quibbles I have are that there’s a type of GRH funding that allows for supportive housing in scattered site apartments that is becoming a bigger thing in Minnesota and that Union Gospel Mission is a second singles shelter in St Paul. But yeah, this is super valuable for people who are interested, since housing is complicated as heck.

    I’d also add that if you, the reader, want to get involved, each county has a Heading Home group that works to coordinate their response to homelessness. All but the Hennepin meeting in the metro are open to the public, I believe. http://www.headinghomeminnesota.org/

    1. Dana DeMasterDanaD

      Thank you! I am aware of the GRH Metro Demo to treat it more like a voucher, but wasn’t sure whether to include that because I didn’t want to get too much into the weeds. GRH is complicated. Rural counties very much wanted that part of the GRH reforms to pass because often they do not have a single GRH-licensed faculty within more than 100 miles, although they have service providers that could provide services in an individual apartment. Right now they have to send people needing GRH very far from friends and family and other supports.

  3. Peter Bajurny

    I know there are Public Housing buildings in the Cedar Riverside complex area, but aren’t the actual towers themselves privately owned, and therefore probably Section 8 or some other tiny program that helps out refugees?

    1. Dana DeMasterDanaD

      Thank you. Yes, I got that one wrong. Cedar Riverside Plaza is an interesting hydrid. Privately owned, but more than half reserved for people with Section 8 vouchers. Housing is so complicated.

      1. Peter Bajurny

        A confusing place for sure. My wife teaches English there with an organization partially funded by the Riverside Plaza Tenants Association. I’d venture a guess it’s one of the locations with the most confusing intersection of programs, purposes, and owners in the Cities.

  4. David MarkleDavid Markle

    The original developers of Cedar Square West (now Riverside Plaza) had quite an idealistic philosophy. They set out to house a “New Town In Town” population that would be extremely diverse in terms of economic and social levels. Unfortunately they encountered severe difficulties posed by an economic downturn and a lawsuit. The property passed into the hands of the federal government.

    Greatly upping the number of Section 8 units in Riverside Plaza was a condition insisted upon by Richard Brustad (Brighton Development) and George Sherman (now Sherman Associates, then Sherman-Boosalis) for their questionable purchase of the approximately 1300-unit complex. The City of Minneapolis and certain neighborhood activists maneuvered to avoid the public auction that was required by federal law and instead place the property in the hands of two of their favorite developers. The developers got a low price, then quickly obtained an inflated appraisal, secured a high mortgage, and pocketed the difference. Subsequent treatment of the facility indicates a use as “cash cow” and repeated efforts by the owners to gain subsidies and governmental breaks above and beyond the subsidized rents. In that respect the most recent abuse was getting the complex put on the National Register of Historic Places for additional subsidies.

    The neighborhood changed radically as a result of that insider takeover. It’s important to note that Washington Properties wished to compete for the ownership, and the results might have been quite different in terms of public costs alone if they had been given a fair chance.

  5. Peter Bajurny

    One other perspective I think of when comparing specifically Section 42 vs Section 8 is trying to influence the supply vs influencing the demand. Section 42 tries to influence the supply by in essence making new units cheaper. Section 8 tries to influence demand by putting more people into the rental market. I’m sure there are entire graduate theses devoted to the subject of which approach is better, but at the least it can be important to have an understanding of the different approach they take to providing housing.

    1. Dana DeMasterDanaD

      Absolutely. My experience is mainly on the human services end, not the developer end. I think a lot about that issue though (see my previous article about the myth of the welfare Queen and how it relates to performance measures). We are so focused on “fixing” people that we lose sight of the system in which they live.

      Section 8 and Section 42 both try to impact the housing market, while EA, GRH, MSA, etc are all focused on providing resources to individuals. That’s another fascinating facet. Sort of like SNAP (food stamps) as a farm subsidy rather than a nutrition program.

  6. Janne

    There is actually a LOT of single family and townhome public housing in the Twin Cities. Glendale Townhomes in Minneapolis and Mt. Airy Homes in St. Paul are prime examples locally.


    The towers tend to be senior public housing properties, and the townhomes and scattered site single family homes house families.

    Both Minneapolis and St. Paul have some of the best-run public housing authorities in the country; I’d rather not reinforce the negative stereotypes you used in this post as they aren’t comparable to what’s here. (I hope you’ll also correct the Riverside reference in the post itself.)

    1. Janne

      Additional comment: Public Housing didn’t really fall out of favor as much as it stopped being constructed (and largely maintained) after the federal government massively cut capital funding for constructing it. Section 42 and other programs were created to address the need for doing something around affordable housing.

      There has also been a concerted public effort to demolish a lot of public housing, most of it through the HOPEVI program that used the land post-demolition to build mixed-income communities. A few were successful, but it resulted in a huge net loss of affordable housing units (that shrunk as the program went on, although the program has ended). The Hollman Decree that reshsaped near north in Minneapolis was HOPEVI-like, although it wasn’t technically through that program.

      1. Dana DeMasterDanaD

        Huh? I didn’t mean to imply either housing authority isn’t doing a good job. Or that public housing is all towers. It is just government-owned, like Mt Airy. I am trying to figure out what negative stereotypes you see. There are long waiting lists, but that’s not due to incompetency. It’s a chronic lack of funding for a demand that far outstrips supply.

        Concerns about concentrated poverty and the move away from single site (be they towers or town homes) came from all sides – residents, communities, the research community, advocates. I think it would be difficult to parse out what came first, cuts in capital funding or desire for something different, like mixed income communities.

        The Hollman Decree and its consequences are fascinating and could make for several posts on their own.

        I don’t have a log in to change the Riverside reference.

        1. Janne

          I’m sorry — my quick response may have come off more critical than intended.

          The version I read said something like, “Think Cabrini Green, Pruit-Igoe, or Cedar Riverside.” (I may be mis-remembering the middle one, though.) I reacted negatively to those, because they are poster-child examples that evoke the worst of tower-public housing stereotypes. It’s been changed to use local examples, and it’s awesome now. Thanks to whoever made the fix!

          If I remember my grad school housing policy history correctly, the elimination of capital funding for public housing was a very explicit federal policy to undermine it and make it untenable. There was a moratorium on construction in 1973, but the biggest and most critical cuts came in the 80s under the Regan administration. My understanding is that was much more about opposing public ownership on principle than any concerns about the housing or its impacts.

          The earliest definitions and work on concentration of poverty emerged in the 70s as well, so defunding public housing (initially) cannot have been a response to those concerns. William Julius Wilson’s seminal scholarship on the topic (in The Truly Disadvantaged: The Inner City, The Underclass, and Public Policy) was published in 1987.

          1. Bill LindekeBill Lindeke

            We/I edited that out today because it was inaccurate, and at Dana’s request. (Authors cannot edit pieces once they have submitted them.) Replaced with actual local public housing projects. Should probably have posted a “correction.” Ought to clarify that procedure! (thinking out loud)

            PS I don’t view Riverside Plaza as a failure at all; rather it’s quite a success story, is it not? Recently rehabbed, been serving an underserved population for multiple generations… The neighborhood is thriving, at least in my eyes.

            1. Sarah Berke

              Hi Bill and Dana – another clarification. (This stuff is very complex). Little Earth is not public housing, in the traditional understanding, either – it is project-based Section 8, and its American Indian tenant preference is completely unique nationally.

              Also, while Sec. 42/LIHTC projects can sometimes be mixed-income, as described here, they are often 100% designated for people who meet the 60% AMI income requirements (or, units within a building may be designated for even lower-income households through other programs, such as project-based vouchers). There are many nuances to the LIHTC program, which most laypeople may not want to dig into, including two different types of credits (4% and 9%).

              Going into the state legislative session, readers should know that state Housing Infrastructure Bonds have been a critical source of additional subsidy for many affordable housing projects in MN in recent years. Check out the Homes for All MN site for more details on the campaign: http://www.mhponline.org/policy/state/homes-for-all

            2. Janne

              I agree Riverside Plaza is a success, Bill. I frequently hear references to them that show me a common Minnesota attitude towards them is anything but charitable.

  7. Sean Hayford OlearySean Hayford Oleary

    Great primer, Dana!

    One possible correction regarding Section 42 — I just learned this myself. You wrote:

    “Rent cannot exceed 30 percent of a tenant’s income.”

    But I believe the rent amount is actually fixed based on whatever affordability level they’re targeting at 30%. Say the median income is $80,000 and you want it to be affordable to half of that — somebody making $40,000:

    $80,000 / 2 / 12 * 0.3 = $1000/mo

    So rent is set at $1,000/mo. But let’s say you don’t make $40,000 — you make $35,000. As I understand it, you still pay $1000/mo, even though this is now more than 30% of your income. It’s only when you’re just on the brink of being disqualified that you hit 30%.

    Others — let me know if this understanding is wrong.

      1. molly

        Sean is spot on – the rent is 30% of the income of a hypothetical person at 50% or 60 % of AMI.

        Since the income and rent limits are established by MSA as a whole has fairly high income limits. For example 1 Occupant @ 60% = $36,420 while 4 Occupants = $51,960.

        The gross rent limit for a 0 bedroom apartment in the Twin Cities is $910 a month. A 2 bedroom is $1170.

        This is why buildings developed under Section 42 are not affordable to many of the people in need of affordable housing. The way that tenants in these building can afford to live there is either they have a fairly moderate income or when they have Section 8 vouchers that are tied to their household incomes.

        1. Sean Hayford OlearySean Hayford Oleary

          Oh right I forgot about the MSA median versus the local median. A person at the median income for Brooklyn Center might be way below the median income for the region (which also includes much wealthier suburbs) — yet rent is set to affordable to half the regional median. Some Section 42 housing projects are set to be affordable to, say, 30% of the median income rather than 50%. But in general, the income limits (and correlated rent) are set regionwide.

          Of course, it’s not the only program. The way it’s usually framed, Section 42 is workforce housing for people of moderately low incomes — teachers, etc — while Section 8 projects or vouchers may be a better approach for the very poor. Unfortunately, while some cities avoid Section 42 housing, nearly all avoid large Section 8 projects. And acceptance of vouchers is up to the whim of a landlord trying to maximize his profit.

          1. Janne

            Section 42 projects generally accept Section 8 vouchers, so often the subsidies get layered.

  8. Rosa

    Thank you so much for this! I knew MSA was a subsidy for people on SSI but I didn’t realize it was specifically for housing.

    1. Dana DeMasterDanaD

      MSA has a housing component of $200, but the majority of recipients just get the $89 supplement. Many more would be eligible for the housing assistance portion, but don’t know about it.

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