Tax credits, Dickinson city assistance sought to build apartments
Despite the support of Dickinson city officials for a company to apply for tax credits for the construction of 54 rental units for "working-class" families, the chances of getting the credits is thinning, officials said.
"There is only a limited amount available, and most of them are expected to go toward Minot," said Dennis Johnson, Dickinson City Commission president. "Minot has great needs as a result of the flood."
The Dickinson City Commission unanimously voted Monday at its regular meeting to support Fargo's Beyond Shelter Inc. in its application for low-income housing tax credits. The Patterson Place townhomes would be located at 600 Dakota Blvd. in Dickinson. The project is estimated at $8 million, said Daniel Madler, Beyond Shelter Inc. chief operating officer.
The reason for building the apartments is to meet a demand for affordable housing, Madler said. He added an oil boom in Dickinson is forcing people out of the community due to high rents.
"Last February, when we started working on the project, two-bedroom rents averaged $1,000 per month," he said. "Just recently looking in the paper, I've seen two-bedroom rents approach $2,000 a month."
BSI would build the townhouse-styled units in two phases. Phase one, planned for construction in August/September, would consist of 29 units. The second phase, set to begin August/September 2013, would initiate the construction of the remaining 25 units. The townhomes would serve households who earn between $8 and $17 per hour.
Madler said the competition to receive the tax credits is tough since most of the credits are planned to go to Minot in response to a flood last year. He said 14 projects applied for the credits last year, but only five were given. He expected the same to happen this year.
Madler said if BSI did not get the credits for the project, the company may wait to break ground until it gets some financial aid.
"Without the credit, it is really tough to build apartments that will be affordable to the target we are looking for," he said.
Johnson said there are three housing projects seeking the tax credits. He expected Dickinson to get one set of tax credits, if any. Though he agreed that housing needs have increased, he understood why the competition is so tight.
"There is no question that Dickinson and other western North Dakota cities have needs, but I think it is pretty hard to argue that our needs our greater than Minot," he said. "Minot had a tight housing market before the flood, then had over 4,000 homes damaged or destroyed, so I can't (argue) with them getting the majority of the housing tax credits this year."
Madler wrote in a letter to the city that rents could start at $419, but rents could be reduced by as much as $150 per month if the city agrees to a payment in lieu of taxes, or PILOT, which would waive building permit fees, utility connection fees, and tipping and landfill fees. Madler wrote in a letter to the city that while the city will lose some revenue, reducing the cost will help lower rents.
"This project is not enough," he said. "I wish we could build 100 units, but we are limited to the amount of financing to construct affordable housing. I think the impact would be huge to give some relief to the residents of Dickinson."
Madler will present before the commission Jan. 16 to discuss the PILOT. Commissioner Clayton Oltmanns said the company is asking for a lot, but the city stands to gain a lot from the
"If we don't get behind a solution to provide low-income housing, our ability to do that in the future is going to be compromised," he said. "It's imperative that we find a way to provide a low-income solution.