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Lower income housing allocations tapped out in North Dakota

Millions in funding appropriated this spring by lawmakers for lower income housing developments has all been pledged to projects in the first four months of the biennium.

Jolene Kline, active executive director of the North Dakota Housing Finance Agency, informed lawmakers of this Thursday during an interim Government Finance Committee meeting.

She told lawmakers that demand remains high statewide for affordable housing, causing a rush for dollars from the $35.4 million in the Housing Incentive Fund.

“There’s not enough funding … to solve this problem,” Kline said. “We have a statewide housing crisis that’s moving further east all the time.”

The fund is for developers who pledge to build affordable and low-income housing, and taxpayers who contribute are eligible for dollar-for-dollar state tax credits.

During the 2011-13 biennium the program was capped at $15 million and consisted entirely of tax credits.

The Legislature expanded the program during this year’s session to include $20 million in tax credits and $15.4 million in general fund dollars.

The Housing Finance Agency approved funds to projects on June 28 and Sept. 30. Between the two rounds of funding a total of $36.9 million was allocated to 34 total projects.

Kline said the extra $1.5 million beyond the 2013-15 appropriation came from a project in Mandan that wasn’t moving forward as expected and the funds were returned. Those funds were utilized in the Sept. 30 round.

“During this biennium the Housing Incentive Fund will create 934 housing units, with 220 set aside for essential service workers and 481 income and rent restricted to low and extremely low income households,” Kline said.

A total of $152.8 million in housing construction activity is expected to come as a result of the state dollars.

“That’s a pretty good leverage of state dollars,” Kline said.

As of Tuesday total pledges from the $20 million tax credit portion from companies totaled more than $10.8 million. She said most of the remaining pledges are expected to come in by the end of the year.

Chairman Jeff Delzer, R-Underwood, questioned some of the projects.

Delzer pointed out that in the previous biennium 90 percent of the Housing Finance Agency dollars were for oil patch housing and areas where disaster declarations had been made. The recent grant rounds included projects in Fargo, Grafton and Jamestown.

Kline replied that with the growth in the oil patch an increasing number of people are living in the central and eastern part of the state with their families and commuting to work.

“The issue is a statewide one,” Kline said.

House Bill 1029, which authorized the continued Housing Incentive Fund, has no language regarding the 90 percent to the oil patch.

Rep. Craig Headland, R-Montpelier, asked Kline what happens to projects the Housing Finance Agency declined to fund.

“If they do get built they’ll be market-rate (rent),” Kline said.

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