Amid continued statewide housing shortfalls, some hope for renewed efforts
Michael Standaert
ND News Cooperative
Before leaving office, former Gov. Doug Burgum proposed spending $96 million on a housing initiative for the current biennium.
Upon assuming the governor’s office earlier this year, Kelly Armstrong upped the ante, proposing $105 million toward similar housing initiatives.
In the end, the state legislature devoted $35 million total toward housing solutions during the last session, with $10 million going to address homelessness.
That left a bucket of $25 million for the state’s housing incentive fund, which creates a super-competitive situation for communities hoping to tap that funding.
Commerce Commissioner Chris Schilken, who served as commissioner for South Dakota’s Office of Economic Development before taking up his new position earlier this year, saw firsthand in Pierre how a strong commitment to overcoming housing roadblocks can make a difference.
South Dakota passed a $200 million housing initiative in early 2023 focused on incentivizing infrastructure upgrades that would spur more housing development.
Through this program, over 70 projects were launched across the state that led to the addition of 12,000 new housing units in just two years.
Schilken said the biggest challenges almost any state in the region faces are workforce, housing, and childcare.
“Housing really is a dominant factor in all of those,” Schilken said. “So, you need to probably start with the housing piece of that puzzle, because that’s going to help with the workforce piece, and ultimately some of the childcare.”
A key component of Armstrong’s plans was a $50 million program to incentivize infrastructure improvements with grants to lower the cost of water, sewage, power, communications, and transportation needed to support new housing.
The plan had similarities to what was successfully rolled out in South Dakota.
Most of the funding targeted communities under 20,000. Matching funds from political subdivisions, local developers and other funding sources within local communities would have been required had the program gone through.
That bill, SB 2225, failed in committee in the wee hours of May 3 just before the conclusion of the legislative assembly.
For those closely following the housing shortage saga, failures of the legislature to back more robust action have postponed inevitable expenditures to the long-term and made it more difficult to attract workers in the short-term.
Constraints to growth
In the northeast part of the state, a recent survey of businesses and communities conducted by the nonprofit group Red River Community Housing Development Organization (CHDO), found rural areas in Grand Forks, Nelson, Pembina and Walsh counties need an extra 4,800 housing units by 2030 to fulfill workforce needs.
Of those, over 2,300 are in rural Grand Forks County alone. The study did not include the city of Grand Forks.
“It’s affecting the economy’s ability to grow,” Lisa Rotvold, RRCHDO executive director, said of the shortfall in new builds. “People don’t realize all the businesses that are functioning out there and there’s really great things happening out in some of our rural communities.”
Rotvold said the survey identified a lack of buildable lots as one of the major barriers for rural communities. Towns have already expanded to their limits, with constraints on growth due to the floodplain and high-value agricultural land.
“So that is a constraint that I think a lot of small towns are kind of battling right now, where they’re at a point where they could grow, and they could see some good economic development or growth,” Rotvold said.
A Spark Building Initiative led by RRCHDO has helped add two homes in Larimore and another two in Lakota, with several more in the works in other towns in the region.
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