Thousands of new housing units will be needed each year for the next 15 years to provide for a state population expected to increase by about 25 percent.
That was the message Gov. Jack Dalrymple and state leaders gave to stakeholders Tuesday at the Governor’s Housing Update in Bismarck. The governor provided more than 50 housing developers, bankers and stakeholders with highlights from a recently completed housing study. The study, released Monday, outlines current housing development across the state as well as projects state housing needs and population growth through 2025.
The study projects that North Dakota’s population will increase by 25 percent, to more than 841,000, by 2025. Currently the population is at just more than 683,000. Statewide housing demand is expected to increase by 30 percent during this period. In 2010 and 2011, 10,034 permits for housing were issued.
“This is the information we need to make good decisions,” Dalrymple said. “This strong period of growth is not expected to ... taper off.” He added that the population figures in the study are based off of permanent population projections.
A total of 10 counties are expected to grow by more than 50 percent, most of them in the western part of the state. In the northwest corner of the state, the population of the three-county area including Williams County is projected to grow more than 120 percent. By 2025, McKenzie County is projected to grow by 169 percent and Divide County by 138.9 percent. Williams County’s growth is projected at 128.2 percent. The city of Williston is projected to grow by 123.3 percent, which would give it a population of nearly 33,000. The 2010 Census put Williston’s population at 14,716.
Dalrymple said the study projects a need for approximately “6,000 to 7,000 housing units per year over the next 15 years” on average. He said this was the equivalent of adding more than the number of housing units annually to house the population of the city of Grafton. Grafton had a population of nearly 4,300 according to the 2010 Census.
The projections come after the state has already seen a 5 percent increase in population from 2000 to 2010.
Dalrymple also told stakeholders about a housing expansion plan he intends on submitting to the Legislature in January if he wins in the November election. He first unveiled his housing plan in July.
He said he would propose an additional $12 million in Flex PACE buydown funds in his 2013-15 budget. The program has grown since first initiated, allowing for interest buydowns on loans made by developers providing affordable housing units in multi-family housing projects.
Another program that would be expanded is the Housing Incentive Fund, currently funded at $15 million. The fund is for developers who pledge to build affordable and low-income housing, and taxpayers who contribute are eligible for dollar-for-dollar state tax credits.
Mike Anderson, executive director of the North Dakota Housing Finance Agency, said about $11 million has been pledged so far. He said the entire $15 million of the Housing Incentive Fund is expected to be pledged by the end of the year.
“We’re extremely excited about what the future looks like for North Dakotans,” Anderson said.
Dalrymple’s proposal would expand the Housing Incentive Fund to include $30 million of future earnings by the Bank of North Dakota for direct investment during the 2013-15 biennium. In addition, $20 million would be available for tax credits in the format already being used under the program.
Dalrymple said having the direct investment would stimulate development immediately when the new biennium begins on July 1, 2013. He said with the tax credits the pledges tend to come before the end of the year when the building season is over. The combination is intended to allow for steady development year-round.
Anderson said the current $15 million from the Housing Incentive Fund is expected to help build approximately 700 housing units. He said if an overall fund of $50 million were approved during the 2013 legislative session he expected the number of units built as a result of the program to “more than triple.”
With the growing population also comes a change in the state’s demographics, Anderson said.
Households consisting of those in what are considered “prime working-age,” or ages 25-44, are projected to increase by 42 percent, or more than 37,000 total households. This is a reflection of primarily oil patch employment, he said.
Elderly households, those 65 and older, are projected to increase by nearly 60 percent, also about 37,000 households. Due to the number of pre-retiree households of people ages 45-64 passing into elderly stage, the increase of such households is projected to only rise by 9 percent.
Dalrymple said the rising elderly population makes it critical to provide affordable housing to residents. Another proposal he plans to make is to expand the Homestead Tax Credit to include more elderly homeowners. His plan would raise the annual household income threshold for qualifying seniors to $50,000. In addition, Social Security benefits would no longer be counted against applicants as part of their income.
“This will make the Homestead Tax Credit ... more mainstream,” Dalrymple said.
Another proposal for the coming biennium is to continue funding the Oil and Gas Impact Grant Fund at a level of $150 million. The fund is used to help fund infrastructure projects in oil country including water and sewer lines, utilities and emergency services. During the current biennium the fund has a total of $135 million. Finally, the state Department of Commerce would make community planning services available to assist western communities struggling with growth.
Dalrymple said the growth in North Dakota is nearly unprecedented in state history. He said much already has been done to address an issue that has been growing for some time. He said much more work is still needed moving forward.
“We need to double down,” Dalrymple said.
The study was conducted by the Center for Social Research at North Dakota State University. A similar study was released in 2004. The study can be found at www.ndhfa.org.