From the Director, March 2016

Jolene Kline, NDHFA executive director

Jolene Kline, NDHFA executive director

The Statewide Housing Conference wrapped up in February and something that I took away is that our fate really is in our own hands in North Dakota right now and we have to make some decisions about how we are going to move housing forward today and well into the future.

Dr. Nancy Hodur’s presentation on the characteristics of workers in the oil industry and those workers’ intentions had a familiar, but difficult, message for us – housing costs and price risks are big factors holding people back from making North Dakota their home. She reported that while 81 percent of the state’s non-resident workers said they have no intention of becoming permanent residents, it was affordable housing options that are an obstacle to the other 19 percent who want to live here full time. While oil patch workers are generally outside our target market because of their higher incomes, the point of housing cost burden is even more dramatic when we think about the non-oil workers and other citizens it takes to make a community.

But cost burden isn’t limited to oil towns – we see it across North Dakota in cities of every size. More than 61,000 low-income households in North Dakota were cost burdened in 2014 with 26 percent of those spending more than half of their income on housing, according to a report from Enterprise Community Partners that was shared at the conference. When people are spending an inordinate amount of money on shelter costs, it has been shown that that burden has much deeper social and economic impacts including food insecurity, a lack of retirement savings, poorer health and poor academic performance by children. Affordable housing frees up income for other critical needs and helps to take the pressure off community resources like hospital emergency rooms.

Affordable housing is also good for the community financially. Thanks to programs like the Housing Incentive Fund and Low Income Housing Tax Credits, millions of dollars have been invested in affordable apartment units which has been shown to contribute to further economic activity, increase tax revenue and create and sustain jobs. For every 100 LIHTC units that are built, $7.9 million in local income is generated in the first year and $2.4 million annually after that; 122 local jobs are created the first year and 30 more annually; and $827,000 in taxes are paid the first year with another $441,000 annually. That has a big, positive impact on our cities.

With the downturn in oil, it is a common myth that all the jobs we saw just a few years ago have gone away. That isn’t true at all and, in fact, there are thousands of unfilled jobs in North Dakota. The healthcare industry is one that is and will continue to face critical shortages. It has been reported that there are more than 1,600 jobs in that field open today.

We learned very quickly during the oil boom that to help fill jobs and continue to make economic progress, we have to have imports from outside our borders. At the Housing Conference last year, demographer Ken Gronbach stressed the importance of attracting workers to North Dakota because we don’t have enough native population to do it. While the state is becoming younger and we are seeing birth rates rise, we still need new residents.

That is a challenge though, considering information from Federal Reserve Bank of Minneapolis economist Sam Schulhofer-Wohl who discussed at this year’s conference why interstate migration has been on a steady decline for the last several decades. He said that it isn’t because people can’t move, but because of the diversification of economies and better information availability. Labor markets all over the United States are becoming more similar and finding out what it’s like to live in a place is easier now than ever before. But North Dakota has broken the trend and has seen a boost in net migration because workers had to come here for oil jobs. A lot of other positions were created at the same time which requires more labor. People will continue to go where the jobs are and the lesson for North Dakota is that we need to provide affordable housing options to attract and keep our workforce.

We also need affordable housing to help our most vulnerable populations like seniors, people with disabilities and low-income families. Communities in the oil patch saw what happens when housing becomes too expensive for seniors – they move away – and that depletes the town of valuable assets both economically and socially.

We are at a point in some places in North Dakota where housing has caught up, but we also have cities that continue to have unmet needs – and we have a lot of places where rehab is needed. USDA Rural Development, HUD Section 8 and Public Housing and LIHTC properties are aging and in a lot of cases need work done to remain viable. If we allow them to drop out of the affordable housing stock, it will have big consequences for the people who currently live in those projects and our communities in general.

While the pace may have slowed some, there is still an underlying sense of optimism in the state that growth will continue. Affordable housing needs to be there to help make it possible. The next few years will be critical in determining how we capitalize on the opportunities we have in front of us and what we want for our communities. I hope you will help us make affordable housing a part of the discussion.

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