The new Divide Vista Apartments was built to help meet the growing housing needs in North Dakota’s oil country.
Located in Crosby, the 12-unit development is the first project to be completed with help from the state’s Housing Incentive Fund (HIF), a program that is capitalized by contributions from state taxpayers. The fund needs to raise more money before the end of the year.
Individuals and corporations receive a dollar-for-dollar state income tax credit for their contributions, which help support the development of rental housing for low- and moderate- income households.
“The purpose of the program is to provide state funding for the development of affordable rental housing, mostly due to the dire need in the western part of the state where the oil country is,” said Mike Anderson, executive director of the North Dakota Housing Finance Agency (NDHFA), which administers the innovative program.
Ninety percent of the fund is set aside for use in energy and disaster-impact areas of the state, and at least 25 percent of the fund must be used in developing communities with fewer than 10,000 people.
A project funded by the HIF must target at least 20 percent of its units to low- and moderate-income households, but most of the projects are going beyond that minimum level and providing more affordable units, Anderson said.
The fund was created by state leaders during the 2011 legislative session at a time when communities in North Dakota’s oil country are seeing a big increase in rents and population. As a result, there is a large demand for affordable housing.
A recent housing study of Divide County, where the new apartment complex is located, found all existing housing to be absorbed.
To help, Crosby-area businesses and residents contributed more than $240,000 to HIF to support the new Divide Vista Apartments, according to Anderson.
The Divide County Economic Development Council NW Holdings, LLC, held an open house for the project July 24. The development features two one-bedroom, six two-bedroom, and four three-bedroom units. The apartments will rent from $515 to $1,200 per month depending on household income and unit size. Additional financing was provided by First National Bank and Trust, Farmers State Bank, and the city of Crosby’s Spirit Fund.
The HIF is authorized for $15 million. So far, about $7 million has been raised. The remaining $8 million must be raised before the end of the year.
Anderson said he anticipates more contributions to come in during the second half of 2012 as individuals and corporations begin to think more about their tax liabilities. Projects cannot start construction until they have the equity from HIF. Officials are also hopeful that the program will get renewed for future years.
So far, about 265 individuals have given to the HIF, making up about 92 percent of the fund’s contributors. They have pledged from $25 to $150,000. The individual contributions add up to about $2.3 million, or 34 percent of the total dollars.
Eight financial institutions and 15 corporations have contributed a total of $4.6 million. Marathon Oil has been HIF’s biggest funder at $2.5 million.
HIF contributions can be targeted to a specific project or community. “State taxpayers can have a say in how their tax dollars are spent,” Anderson said.
So far, NDHFA has made conditional commitments to 17 projects and is reviewing another seven.
For more information, visit www.ndhousingincentivefund.org.