From everything we’ve heard, the 2015 Legislative Assembly will be one to watch.
There will be no shortage of ideas and proposals to sort through and housing again will be a big topic of discussion. The North Dakota Housing Finance Agency has a couple of pieces of legislation we’ll be working on.
The Governor proposed in his Executive Budget Recommendation increasing the Housing Incentive Fund to $50 million with $20 million coming as a general fund transfer and $30 million in dollar-for-dollar income tax credits. The General Fund dollars are included in his “Jump Start” funding bill which legislators hope to pass at least by crossover at the end of February. The HIF reauthorization language and tax credits are included in the Agency’s budget bill.
The Essential Service Worker priority that was included in the Housing Incentive Fund last time will be continued in the proposed 2015 legislation. There were 238 ESW units that were created under HIF II. As ESW employers experience significant increases in hiring to deal with overall population growth, the need for ESW targeted units has grown as well. In a survey conducted this fall by NDHFA, employers identified the need for 774 additional housing units for Essential Service Workers in the next two years.
All around HIF has been an effective affordable housing development tool. In the past biennium, HIF helped create 942 housing units with 476 income and rent restricted to low- and extremely low-income households. The $37.7 million in state funds will spur more than $157.6 million in housing construction in communities across the state. In the life of the program, more than 1,500 housing units have been created leveraging $251 million in construction activity.
While that is an amazing accomplishment, the need for affordable housing still exists. Population growth is projected in the oil-impact areas to be anywhere from 29,000 to 44,000 people in the next two years and the rest of the state has already exceeded population projections with more growth expected. This growth all translates into the need for more housing.
A bill the Agency pre-filed will deal with the property tax reduction for affordable housing. NDHFA is seeking to amend Subdivision f of subsection 43 of North Dakota Century Code 57-02-08. Subsection 43 was adopted by the Legislative Assembly in 2013 and provides that non-profit owners of housing projects receiving assistance through a local, state or federal affordable housing program may make a payment of 5 percent of rents adjusted by subtracting utility costs in lieu of paying property taxes. The current language in Subdivision f restricts the exemption to 501(c)(3) organizations. The amendment seeks to make Subdivision f consistent with Subdivision a, which states qualified nonprofit entities are those “defined in section 42 of the Internal Revenue Code [26 U.S.C. 42].”
Section 42 is the portion of the Internal Revenue Code that deals with Low-Income Housing Tax Credits. Qualified nonprofit organizations are defined in that section as including both 501(c)(3) and 501(c)(4) organizations. In the course of certifying the qualifications of properties under the affordable housing property tax exemption in the past year, NDHFA found some projects which otherwise would have qualified except that they were structured as 501(c)(4) non-profit entities and thus were excluded from receiving the exemption.
NDHFA will also be tracking any other housing bills that pop up and will be glad to work with any partners on legislation that will help us fulfill our mission of helping to house every North Dakotan. If you or your organization have any housing issues that you’d like to discuss, please feel free to call on us at any time.
NDHFA executive director