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Taxpayers can direct state taxes to help build housing

Posted 9/11/13 (Wed)

By Kate Ruggles
Farmer Staff Writer

One of the biggest areas of concern facing Watford City and McKenzie County leaders is the lack of affordable housing. While new apartments are being built, the rents are still out of reach for the majority of residents, especially those not associated with the oil industry.
But thanks to a new state program, the Housing Incentive Fund (HIF), help may be on the way. However, a  key component to making the HIF program work locally is the willingness of area residents and businesses to contribute their state income taxes to local projects.
“Everyone is fired up about how little the state gave to McKenzie County,” states Katie Walters, property manager for Wolf Run Village. “This is a way for individuals and businesses to direct the money they are required to pay to the state, their state tax liability payment, back to McKenzie County.”
Walters states that Wolf Run Village, which provides affordable housing for teachers and law enforcement officers was funded, in part, through HIF, as was the Lutheran Social Services Prairie Heights Apartment complex in 2012.
In addition, the McKenzie County Healthcare Systems (MCHS) is looking to build an apartment complex to offer its employees affordable housing, as is the U.S. Forest Service.
These projects are specifically designed to meet the needs of low to moderate-income families, which is one of HIF’s main qualifying criteria.
“Most public housing programs are for low-income families. But we are finding that a similar amount, if not more, of moderate-income families are in need of affordable housing,” states Gene Veeder, director of the McKenzie County Job Development Authority. “Most people earning a median income or below cannot afford a $2,000 rent or mortgage payment. And no other public financing option out there is available to meet the housing needs of both low- and moderate-income families.”
Another criteria that gives projects priority through HIF is that it is for essential service workers, like police, firefighters, teachers and city employees.
“If the Wolf Run housing had not opened up, teachers would not have been able to move here, and some would not have been able to stay here,” states Walters. “That would have put us in the position of having class sizes of 30 or more kids.”
Likewise, without the affordable housing provided through the HIF program, MCHS cannot fill its open positions.
“An affordable two-bedroom apartment for the service employees of MCHS would need to rent for approximately $800 per month,” states Dan Kelly, MCHS CEO. “Having an apartment building will allow us to fill open staffing positions.”
Currently, according to Kelly, many of MCHS’s open positions are being filled by travelers. He is hoping that MCHS’s new 24-unit apartment building will help meet the need of affordable housing for hospital system employees to rent, and end their current situation of having to fill essential positions with temporary personnel.
“Through the support MCHS has received through HIF, as well as the Watford City Roughrider Fund, this project has moved from being a dream to a reality,” states Kelly.
But the project is not yet fully funded.
“Of the $1,200,000 received from HIF, the healthcare system is tasked with raising $684,000 in contributions into a HIF fund designated for this project,” states Kelly.
Similarly, Wolf Run Village and the U.S. Forest Service project find themselves still in need of McKenzie County taxpayer contributions as well.
According to Walters, now is an excellent time for businesses and individuals to get on board and direct their state tax liability to fund one of these McKenzie County housing projects.
“It is a really great time to contribute, because the third quarter quarterly tax payments are almost due. But it is also coming time for the year-end payments,” states Walters. “It is a way for people who do not have extra money lying around to give to local housing projects.”
Max Wetz, director of Public Affairs for the North Dakota Housing Incentive Fund, states that the HIF project hopes to give $35.4 million in housing grants for approved North Dakota projects during this biennium, $15.4 million will come from the state’s General Fund, and $20 million will come from taxpayer contributions.
Currently, HIF has just under $5 million and they will be looking to raise the remaining $15 million before Dec. 31, 2014.
“But the sooner the money comes in, the sooner we can fund projects, which means the sooner they can get started,” states Wetz.
Walters states there is a process to go through and forms to fill out, but anyone who is willing to do it can help provide much needed housing to McKenzie County.
Anyone wishing to contribute to the HIF program is encouraged to visit www.ndhfa.org and click on the link to the North Dakota Housing Incentive Fund. From there, interested contributors should click on ‘Contribute to the Fund.’ That will lead to a link for a contribution form.
According to Kelly, it is essential that people contribute to the HIF project. Anyone who does should note on their Commitment to Contribute form who the contribution is specifically intended for.
There are no limits to the amount that can be contributed, and any remaining tax credits can carry forward for the next 10 years.
Walters and Kelly also state there is the possibility of contributions being included in federal taxes as a charitable deduction, and that anyone contributing to the HIF program should consult their tax professional about that opportunity.
“It is almost a no-brainer,” states Walters. “There is no out-of-pocket money. You are telling the state, ‘I have to pay this much in income taxes, don’t put it in the general fund, put it toward....’”