More money sought to increase affordable housing in N.D.

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 was created during the 2011 legislative session that accepted donations in exchange for state income tax credits. The funds, then, are 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, and the Legislature’s 2012 interim Energy Development and Transmission Committee has proposed a bill that would 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, spoke in favor of the bill.

Phillips said, on average, a worker will move near the Oil Patch and leave in less than two years because he or she can’t move his or her family to the state with very few affordable housing options.

“They just can’t afford to live in North Dakota,” he said.

But investors are skeptical of building as it’s difficult, and costly, to build in the Oil Patch where there is very little housing for construction crews and few alternatives.

The bill would allow businesses in the Oil Patch that 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 that any project receiving public funding, such as help from the Housing Incentive Fund, 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.”

Committee member Rep. Marie Strinden, D-Grand Forks, said she thinks the bill is great and has heard from many housing organizations in Grand Forks that have been battling a housing shortage as well.

“I sat out and didn’t say much this go around,” she said. “But I hope the needs out west are addressed and we can get some help across the state.”

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-impacted 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 to 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. There were 5,526 units permitted from 2010 through 2012. During the same time, only 517 affordable housing units were developed.

“It is not near enough to solve the problem, especially when it comes to helping our most economically challenge households,” Anderson told the committee.

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?”

Anderson said the legislation would also increase the availability of funds by allowing smaller growing communities to take part. It would also provide an emergency clause that would take effect immediately after both the House and Senate pass the bill and Gov. Jack Dalrymple signs it into law.

“Without (the clause) we will not be able to create an allocation plan in time to substantially get things done for 2013 construction season,” he said. “We can get projects moving right away with it.”

Anderson told committee members the proposed changes to the fund would easily address the issues brought up by Walters, who used the term “crisis” several times to define what is happening in the Oil Patch.

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

Tags: news, housing, energy