More than 600 private investors helped to fully capitalize North Dakota’s special $15 million state Housing Incentive Fund (HIF).
Created by the 2011 state Legislature, the HIF is used to develop affordable multifamily housing, with fund participants receiving a dollar-for-dollar state income tax credit for their contributions. The contributions can be targeted to a specific project or community.
Ninety percent of the contributions were by individuals who contributed an average of $10,021. The largest corporate supporter was Marathon Oil Co., contributing $3 million. Gate City Bank provided $1.25 million, the most by a financial institution.
“Developer interest in the program was strong from the start, with all of the available financing spoken for in less than a year,” said Mike Anderson, executive director of the North Dakota Housing Finance Agency (NDHFA), which administers the HIF.
NDHFA has conditionally committed HIF dollars to 26 projects to create 739 new units in Beach, Belfield, Bowman, Crosby, Devils Lake, Dickinson, Grand Forks, Kenmare, Killdeer, Kulm, Mandan, Minot, Parshall, Ray, Watford City, and Williston. Total construction cost for the projects is $104 million.
Although the program can be used throughout North Dakota, much of the focus has been in oil and disaster-impacted areas of the state. Many communities are seeing a big increase in housing demand as a result of the energy industry boom. The HIF provides developers with important gap financing.
A recent housing needs assessment forecasts that North Dakota’s population will grow by 25 percent or 170,000 people by 2025. Households at or below 80 percent of the median family income are projected to increase by 45,526 or 55 percent of the total household growth.
While the HIF was initially authorized for $15 million, there are plans to expand the program.
Gov. Jack Dalrymple has proposed transferring $30 million from the state general fund for direct investment in HIF for the 2013-15 biennium. An additional $20 million in tax credits would bring the total fund to $50 million. The proposed legislation has been pre-filed as House Bill 1029.
