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Executive Summary <br />Minnesota faces a significant shortage of affordable housing. Middle and low income <br />Minnesotans are finding it increasingly difficult to rent or buy a home. The supply of low- <br />cost rental housing in Minnesota has actually fallen by a quarter over the last decade, <br />while the cost of buying a home has more than doubled between 2012 to 2022. <br />In recent years, state and local governments have taken steps to fund new affordable <br />housing while promoting development of market -rate housing to help ease a shortage <br />that is pushing up prices for all Minnesotans. Yet without stronger oversight over the <br />use of Low Income Housing Tax Credits and Tax Increment Financing programs, there is <br />a danger that new housing projects will be built on the backs of vulnerable workers who <br />earn too little to live in the homes they build. <br />This report details the extent of taxpayer support for low -road construction practices <br />that exploit immigrants and other at -risk workers. The report explores how public <br />financing flows to a handful of private for -profit housing developers that employ <br />contractors that have been charged with or face allegations of exploitation according to <br />interviews with workers and industry experts. <br />Key Findings: <br />• Minnesota faces a severe housing crisis caused by a shortage of affordable homes, <br />and the problem is getting worse. The supply of low-cost rental housing in Minnesota <br />has decreased by a quarter over the last decade, from 408,599 affordable units in 2011 <br />to 308,733 units in 2021. <br />State and local governments are making unprecedented investments in new <br />housing development. In 2023, lawmakers earmarked a record $1 billion for housing <br />affordability. <br />Unfortunately, use of contractors that have a record of cheating workers or face <br />allegations of exploitation is far too common on affordable housing projects. <br />While some sources of affordable housing development funding include robust <br />labor standards, two leading sources of funding, the Low -Income Housing Tax Credit <br />(LIHTC) program and local use of tax increment financing (TIF), often lack robust labor <br />standards. Our research found evidence that, since 2016, workers on 25 projects <br />that received approximately $31 million in LIHTC funding were potentially at risk of <br />exploitation by problem contractors. <br />Our research further uncovered that, since 2018, workers on 14 projects that received <br />approximately $53 million in TIF subsidies were potentially at risk of exploitation by <br />problem contractors. <br />Underfunded Minnesota: Collective Investment for a Brighter Future <br />