North Dakota affordable housing fund to expire
BISMARCK, N.D. (AP)(STLRealEstate.News) — A state income tax credit that helped build hundreds of affordable housing units in North Dakota’s oil patch will expire at the end of the year, with lawmakers and the new governor signaling they have no appetite to renew it amid a lackluster economy caused by a prolonged slump in crude and crop prices.
Sen. Dwight Cook and Rep. Craig Headland, Republican chairmen of their chambers’ respective tax committees, said the North Dakota Housing Finance Agency’s low-income housing development program has outlived its usefulness due to a downturn in oil drilling.
“Times have changed,” Cook said. “We got excess housing all over the place now. If ever our situation changes, like it did when we created it, we can create another one.”
The program, which the Legislature approved in 2011, gave individual and business donors a dollar-for-dollar tax credit to subsidize construction of affordable dwellings for low-income people, seniors, teachers, law enforcement officers, emergency workers and others whose salaries weren’t at the same level as those working for oil-related companies.
North Dakota Petroleum Council President Ron Ness, whose group represents hundreds of companies working in the state’s oil patch, said the housing program has been “extremely valuable,” but is not needed now.
“We felt that fund has served its purpose and certainly the housing market has adjusted,” Ness said.
To date, the program has given $65 million in tax credits, with most of the write-offs coming from financial institutions and large corporations that include energy companies. Tesoro Corp.’s $5.3 million contribution is the program’s largest, according to Sarah Mudder, a spokeswoman for the housing agency.
“It’s by far our most generous credit,” state Tax Commissioner Ryan Rauschenberger said of the program. “Nothing else even comes close.”
Individual donations over the past six years have come in from 1,177 North Dakota residents and total $13 million, or 20 percent of the total tax credits, data show.
The Legislature also has given the program $15.4 million from the state treasury, plus $10 million in profits from the state-owned Bank of North Dakota.
In total, the program has allocated $90 million that has leveraged almost $400 million in construction financing for 74 projects that contain some 2,324 units, the housing agency said.
Former Gov. Jack Dalrymple, once a leading proponent of the tax credit, did not include the program in his proposed $13.4 billion, two-year spending plan that includes cutting the number of state employees and decreasing higher education funding to shore up the state’s budget hit by depressed oil and crop prices.
Dalrymple’s suggested budget almost certainly will be reshaped by Republican Gov. Doug Burgum, who took office this month.
Burgum campaigned on a message that North Dakota has gotten itself into a fiscal jam because of “runaway spending” that must be controlled to rebuild its treasury.
Burgum spokesman Mike Nowatzki said the new governor will disclose his spending priorities when the Legislature reconvenes next month. It appears doubtful Burgum would support continuing the program.
“The governor is looking for things to take out the budget — not for things to put back into it,” Nowatzki said.
JAMES MacPHERSON, Associated Press
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