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$35.4M available as incentive to build low-income housing

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$35.4M available as incentive to build low-income housing
Dickinson North Dakota 1815 1st Street West 58602

BISMARCK -- Multi-unit contractors now have $35.4 million to work with to create affordable housing for essential service employees and low-income families.

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The Industrial Commission approved a series of changes Tuesday to the Housing Incentive Fund after the state Legislature tweaked parts of the fund and approved $20 million in tax credits and an extra $15.4 million from the state's general fund.

The Housing Incentive Fund is administered by the Housing Finance Agency. It delivers up to $3 million, or 30 percent of the total cost of a low-income multi-unit building, using contributions from income tax payers under a dollar-for-dollar tax credit program.

"The point is to provide help to entities where they are struggling to recruit and retain workers," said Jolene Kline, planning and housing development director for the Housing Finance Agency. "The pay scales are not sufficient to go out and rent in the open market, so the second focus is on helping meet the needs of the general population of low- to moderate-income families."

The first quarterly disbursement of funds will be June 28, Kline said.

On Tuesday, Kline was also appointed by the commission as interim executive director of the agency, replacing Michael Anderson, who will retire Friday.

With the reauthorization of the fund, Kline said contractors are excited to see the program moving again. The agency has fielded calls from contractors over the last six months.

A lot of the interest is from contractors that weren't able to take a piece of the $15 million as part of the original program.

"Ninety percent of that was targeted for oil country, which left very little for the rest of the state," she said. "A lot of projects that have been in the development stage are waiting for some funding resources to go out east."

With the program's reauthorization, she is anticipating strong developer interests from the central and eastern parts of the state as well.

The program is on a first-come, first-served basis, with no money set aside for specific areas of the state.

The program allows taxpayers to contribute to a specific project or specific community or region. The taxpayer will receive a tax credit for the amount of the contribution. So far, the fund has received two contributions -- both worth $3,000 -- since Gov. Jack Dalrymple signed off on the Legislature's changes and reauthorization of the program.

The fund was created to require contractors to have income and rent restrictions on new units for at least 15 years, based on Housing Finance Agency income limits that go up to 140 percent of the local median income.

For instance, Kline said a single individual in Williams County could make $63,000 a year and still qualify for one of the units, but will pay a higher rent than someone at 50 percent of the median income, which is $22,600 in the county.

To define what projects receive priority, the Legislature defined an essential service worker as an individual employed by a city, county, school district, medical or long-term care facility, the state of North Dakota, or others as determined by the agency who fulfill an essential public service.

The Legislature and Housing Finance Agency also want to take nontraditional landlords out of the rental property business.

Since the oil boom, schools and local governments have bought or built units for their employees to live in.

The incentive fund can now be put toward the purchase of these units by contractors or companies, as long as they serve essential service workers and low-income families.

The housing agency fielded a survey to see how many units were owned by nontraditional landlords, and 216 units were found to be owned by schools or counties from the surveys that were returned.

Williams County has a 31-unit building for county employees, the Mackenzie County Public School District owns 16 units and Tioga has nine units for teachers, Kline said.

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Mike Nowatzki
Mike Nowatzki reports for Forum News Service. He can be reached at (701) 255-5607.
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