Posted 2/01/12 (Wed)
By Lauren Billing
Farmer Staff Writer
Last week a number of different infrastructure agencies came together in several counties across western North Dakota to present their respective programs and funding abilities. The group met in Watford City on Monday, Jan. 23, to discuss the issues as they pertain specifically to McKenzie County.
“The main challenge still seems to be housing,” says Brent Sanford, Watford City mayor. “The more businesses that come to the area, the more affordable housing becomes an issue. Many of the teachers hired on at the school district are having to live in their parents’ basements.”
McKenzie County is experiencing a housing crunch like never before. Not only are there not enough places to live, many of those who have found a place are having a hard time affording skyrocketing rents.
The need for more housing is dire, but the most plaguing issue involved with the housing need is finding funding for the construction of affordable housing units.
“Finding developers for affordable housing projects is hard because most developers are looking at market price or for-profit projects,” said Gene Veeder during the meeting’s discussion on housing.
Last year the North Dakota Legislature approved the Housing Incentive Fund (HIF), a new program aimed at alleviating such funding challenges. The North Dakota Housing Finance Agency (NDHFA) holds authority over the fund and describes it as a tool that will be used “to close the gap in the financing of affordable housing that would otherwise not be feasible.”
The HIF is designed to provide up to $15 million in tax credits for developing low-income housing, 90 percent of which is designated for use in oil-producing counties or federal disaster areas. The fund functions by taxpayers paying into the program in exchange for tax credits. Those contributing can designate a general area, city, or specific project they would like their money to benefit.
The HIF initially sounds like a great way to make low-income housing a reality, that is until you really look at how the funding works.
A 10-page detail describes what the fund is, how to use it, and the responsibilities of receiving a monetary award from the fund. It makes the program seem like the answer, but the final page dashes what might have been a great program.
All HIF contributions will be structured as a loan with repayment terms determined on a project specific basis as necessary to achieve project feasibility states the NDHFA’s allocation plan on their web site. There is also a deed restriction placed on the land to enforce the income targeting and rent restriction requirements by which the loan was initially granted, according to the NDHFA.
Essentially the only thing the HIF program secures is a guaranteed loan. It does little to actually close the concrete cost gap from needing low-income housing to constructing it.
Mike Anderson, NDHFA executive director, knows the challenges in making affordable housing viable. The amount of money needed in initial investment for any kind of low-income housing causes many projects to die before they even begin.
Anderson believes that the answers to such development issues need to come from the communities themselves. Though he speaks of the merits of the HIF, he seems to understand its limited ability to be of substantial assistance.
“Put pressure on your community for a balanced strategy for affordable housing,” recommends Anderson.
A recommendation much easier said than done. Many communities in need do not have the kind of private investment required for such a project, and many cities and counties most in need do not have the money to spare. So what happens then?
Watford City has been fortunate enough to experience a community-founded and driven project that could prove to be the best answer to closing the housing gap.
Lutheran Social Services (LSS), under the direction of Jessica Thomasson, worked on an affordable housing project in Watford City in 2009. It resulted in a rental development, Creekside Cottages, consisting of 12 twin homes (24 rental units) situated just south of Watford City Elementary School.
The hope now is that LSS will continue its work in Watford City and throughout McKenzie County to create new housing. In partnering with community businesses, organizations and individual donors, LSS has been able to put people in homes, a feat that McKenzie County desperately needs to continue.
“LSS is going to have to be our savior,” says Sanford.
The infrastucture meeting also highlighted officials from the Department of Trust Lands and the Department of Transportation (NDDOT), along with the NDHFA. Each agency reported how it is using the ever-growing amount of funding the state has allocated to try and catch up with the growth in western North Dakota.
The Department of Trust Lands has been appropriated over $100 million for impact grants. The NDDOT has seen a 25 percent increase in traffic in oil counties and has dedicated $305 million to highway improvements in western North Dakota alone in 2012.
Yet even with all that these agencies have put in place, much is still needed. And for McKenzie County, the one overwhelming infrastructure issue is the ability to construct affordable housing.
Talks with the state continued in Bismarck last week as city, county and school officials sought out lawmakers to ask for more state-directed aid for western North Dakota’s oil-producing counties.
“We’re speaking a language we’ve never heard of in Watford City, because there weren’t homes built here for 25 years,” Sanford told the Bismarck Tribune last Thursday after speaking to the North Dakota Legislature’s interim energy committee about the need for additional funding. “We’re talking about developer agreements and on- and off-site improvements ...we hadn’t heard of this stuff.”
Though Thursday’s meeting was much more action-oriented, there remains an inability for the state to do as much as is needed, as fast as it is needed.
“It’s disjointed,” describes Sanford. “There are lots of good intentions from the agency heads and the governor’s office, but the information gathering and dissemination is extremely disjointed.”
With conservative estimates showing a population growth to about 7,500 in Watford City, the need for housing looms dominate in the overwhelming infrastructure scramble. And with the state’s housing projects providing little viable aid, it seems the funding answers to providing affordable housing are going to have to come from the communities themselves.
Luckily, Watford City and McKenzie County are home to businesses and individuals who are truly committed to seeing their community prosper and their neighbor’s needs met. More support for projects like those executed by LSS will help in alleviating the housing need.