Contributed Article by Rob Port
During the 2011 legislative session Governor Jack Dalrymple sought from the state legislature, and won, the creation of a housing incentive fund.
The premise behind the fund is that private businesses, organizations and individuals can make donations to the fund in exchange for a dollar-for-dollar credit on their state income taxes. The money in the fund is then used to subsidize housing development in oil-impacted communities, with a promise from the developers that a certain number of the units they create be “affordable” per the government’s guidelines.
In theory, this is about helping the private sector meet skyrocketing demand for housing and, thus, keep housing costs low. In practice, it’s little more than a sop to developers paid for by the taxpayers. After all, ultimately those contributing to the fund get their money back in the form of tax credits. It’s really the North Dakota taxpayers who are footing the bill.
But there’s another problem. It seems as though the program is beginning to operate far outside of the oil patch.
“The funding of projects in some eastern cities drew a critical eye from the committee’s chairman, Rep. Jeff Delzer, R-Underwood, who said his understanding was that the incentive fund was meant mostly for oilfield cities that were far behind in meeting housing needs,” Forum Communications journalist Mike Nowatzki reported of a report by the fund’s administrators to an interim legislative committee.
The administrators responded to Delzer’s concerns by pointing out that most of the fund’s money is going to oil patch project. But she also noted that “because we have a statewide housing crisis right now, that’s moving further and further east all the time.”
Does North Dakota really have a “statewide housing crisis,” or is this just an excuse to expand this development subsidy outside of its original justifications?
Do we really need to be pouring taxpayer dollars in to what is, and what is expected to remain, a very hot market for housing across the state?
That should be something citizens and legislators alike keep an eye on. .
While it may have been justified to create a program like this when the housing situation in oil patch communities was dire, with rents rivaling what one might expect to pay in Manhattan, but it becomes problematic when the program begins serving housing markets that are far from dire.
Government programs have a bad habit of growing into things they were never intended to be. We need to be sure that doesn’t happen with this program.
(Photo credit: Bakken.com)