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TJ Jerke, Forum News Service, Published January 14 2013

More money requested to increase affordable housing in North Dakota

BISMARCK – Rapid expansion in western North Dakota has created “Third World living conditions,” according to testimony Monday morning in favor of increasing North Dakota’s Housing Incentive Fund.

The incentive fund, created during the 2011 legislative session, accepts donations in exchange for state income tax credits. The funds are then given to companies to build affordable housing for middle-to-low-income families in oil-impacted communities.

The fund topped its $15 million capacity in 2012 and is providing funds for 26 housing projects in 16 North Dakota communities. The Legislature’s 2012 interim Energy Development and Transmission Committee is asking to increase the fund.

House Bill 1029 looks to jump-start more investing in the Oil Patch by increasing the available state income tax credits from $15 million to $20 million. It also would add an additional $30 million from the state’s general fund to give to affordable housing investors.

Katie Walters, director of Bakken Housing Partners, is currently developing an affordable housing complex for essential service personnel in Watford City. She told the House Finance and Taxation Committee an increase in the fund would “ensure the service workers are able to find housing and serve the needs of their community.

“Most public service workers are not making plenty of money and are living in places where you would not want to live,” said Walters, referring to living conditions as “Third World.”

John Phillips, president of the Economic Development Association of North Dakota, also spoke in favor of the bill.

Phillips said, on average, a worker will move to the Oil Patch and leave in less than two years because they can’t move their families to the state due to few affordable housing options.

The bill would allow businesses in the Oil Patch who are interested in investing but do not have housing for their employees to set aside a few units for their employees within the housing development they build, Anderson said. The current law requires any project that receives public funding must make all units public on a first-come, first-serve basis.

Committee Chairman Rep. Wes Belter, R-Fargo, said he has a few concerns about the bill.

“We get too quick with taxpayers’ dollars,” he said after the hearing. “The committee will really look into it, but they barely got rid of the $15 million.”

Mike Anderson, director of the North Dakota Housing Finance Agency, said increasing the fund would result in about 2,500 housing units and a total investment of about $350 million in additional rental housing over the next two to three years.

A statewide housing needs assessment was published last fall that projected household growth and construction activity in oil-affected communities in recent years, but “those numbers are dwarfed by current needs,” he said.

The assessment projected an average 7,838 new households statewide will be built between 2010 and 2015. Of those, 3,647 will be considered low-income households.

Anderson said there is construction taking place, but not as quickly as the Oil Patch needs. From 2010 through 2012, 5,526 units were permitted. During the same time, only 517 affordable housing units were developed.

Belter believes housing has started to catch up with demand, so the committee will take some time to look into the issue.

“We know there is a need for housing, but it concerns me that developers might be sitting around waiting for a tax break,” he said. “Would they build without a tax break?”

Reach Forum News Service reporter TJ Jerke at tjerke@forumcomm.com or (701) 255-5607.