By: Michael Achterling
BISMARCK, N.D. (North Dakota Monitor) – Gov. Doug Burgum outlined Tuesday a $96 million housing initiative that aims to provide financing assistance to developers for building new single and multi-family homes and take advantage of existing infrastructure to help limit costs.
“We’re growing and our economy is growing,” Burgum said during a news conference at Bismarck’s Custer Park. “We can’t grow unless we’ve got workforce, and we know we’re having challenges with workforce coming to our state because housing in certain markets, in certain places in the state, has gotten very tight.”
The recommendations will be part of Burgum’s state budget proposal he’ll announce during the first week of December.
The plan calls for nearly $39 million to be put toward “financing innovations” to provide gap funding for developers to construct single and multi-family homes through the North Dakota Housing Incentive Fund, which is managed by the North Dakota Housing Finance Agency.
It would also provide low interest construction loans for projects relating to entry-level homes and aging-in-place home designs within established neighborhoods.
“None of the programs we are talking about today are going to be directed toward greenfield, or new infrastructure,” Burgum said. “We have to invest in places where we’ve got existing infrastructure.”
Burgum emphasized that focusing the projects in areas with existing streets, utilities and fire and police coverage will not increase the property tax burden for the community.
The plan would also incentivize partnerships at the local level through low interest loan programs to improve existing houses with repairs so people can stay in their homes longer and keep those homes in a sellable condition, if the homeowner decides to move.
Almost $23 million would be used to fund innovation grants to spur additional housing projects in urban and rural areas.
Burgum said clearing some of the permitting and zoning “red tape” would also help promote the next generation of manufactured housing, which is modular home designs.
“As the manufactured home moves from what we might traditionally think about with mobile homes, which people think is substandard, there’s a whole new industry coming and we’ve got to attract it to North Dakota,” Burgum said. “There’s a way to lower the cost of homebuilding with modular, manufactured housing as a key part of that, that hasn’t really arrived here … and we’ve got to make sure our code allows that to happen.”
The ideas are the result of the North Dakota Housing Initiative Advisory Committee, which has been working to develop a comprehensive housing strategy. The committee held five listening sessions with stakeholders in Bismarck, Fargo, Harvey, Williston and at the Strengthening Government to Government Conference with tribal nations.
Committee member Kim Settel, vice president of retail banking and lending for Gate City Bank, said clearing regulatory burdens for new construction would go a long way toward incentivizing new home construction. She also emphasized finding ways to decrease mortgage rates.
Burgum highlighted that some homeowners with grown children may want to downsize and sell their home to a new family, but high interest rates are a deterrent.
“If we can get them into a rate that is more amenable to what it was, then you can open that house up for another family,” Settel said.
She also said no two housing markets are the same and what may work to increase housing in a city like Fargo may not be the same approach needed in Bowman.
The plan also provides $10 million to address ongoing homelessness through emergency shelter operating funds and re-housing assistance.
Burgum said homelessness can occur rapidly for families, based on circumstances. He added about a third of all homelessness involves families with children.
“It’s not just about individuals, it’s about families,” Burgum said.
State Rep. Mike Beltz, R-Hillsboro, a member of the Housing Initiative Advisory Committee, said the best thing you can do for a homeless person is to put a roof over their head.
“It provides them stability and exponentially increases the opportunities for positive outcomes on that front,” Beltz said.
Burgum said about $16 million of the new initiative will provide eviction prevention resources and housing assistance for those deemed high-risk for housing instability. To receive housing assistance, the recipient must take part in a financial coaching program, he said.
“We just want to make sure people understand, on the financial side of things, both the responsibilities and the opportunities within home ownership,” Burgum said.
Beltz said the housing initiative proposal will fall across multiple state agencies that will administer the programs.
To assist the construction workforce, $6 million from the program would be made available through grants to local schools for continuing to promote construction careers.
Lawmakers will consider Burgum’s budget proposal, as well as budget recommendations from Gov.-elect Kelly Armstrong, when the legislative session begins Jan. 7.
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