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Minot housing in bigger pinch than most thought

December 11, 2010
By DAVE CALDWELL Staff Writer dcaldwell@minotdailynews.com

With national news outlets like CNN paying attention to the housing crunch in the oil patch, it's no surprise that the Minot area is feeling the pinch as well. To just what extent that grip has tightened might shock many, however.

The cable news giant visited oil-soaked Stanley recently, where a former hospital is being renovated into 17 apartments using money from a state pilot program.

But closer to home, in the past three years nearly one in five families in the Minot area who need housing assistance have been unable to receive it due to the area's waning supply of affordable living space.

Not surprisingly, during that same time period the waiting list for one of the Minot Housing Authority's assistance programs has exploded, increasing to the tune of 5,000 percent.

Tom Pearson, MHA's executive director, cited some sobering statistics Tuesday during his annual presentation to the Ward County Board of Commissioners.

"This starts back in about 2008, you can see a huge change in the housing needs in our community," Pearson said. "For example, our voucher program, which is our rental assistance program, there were basically 14 people on the waiting list (in 2008). Today, we're pushing 700.

"Back then, we could help almost 800 families in our community. Today, we can only help about 641, because the rents have increased so much it's increasing our budget."

Pearson said the authority's budget is determined on a dollar basis and does not fluctuate with usage statistics - or with rising rent costs.

"We get about $250,000 per month for rental assistance payments for our community," he said. "For every $5 that our average rents go up in our community, we have to eliminate eight people out of the program. Today, our average payment that we're making is $390 per family. When we started this, it was just under $300. It's almost an increase of $100 over these last three years."

"We've got a person who was working up at the college in their custodial department," Pearson said. "He's leaving the state - he can't afford to live here anymore. People are moving in together, because we can't help them. I would assume they're coming to social services programs asking for help, but we don't have money to help them.

"They're trying to find other ways to change their budgets to offset the increase in their rent."

The fact that the vacancy rate is less than one-half of 1 percent does little to help the situation, he said.

"Once they do get a voucher in hand, it's very difficult for them to use it because they can't find a place that will meet our payment standards that are set by HUD (the U.S. Department of Housing and Urban Development)," Pearson said. "These people have a piece of paper that they think is going to help them.

"If we issue 10 of them, maybe two or three people are going to be able to find a place that meets the requirements in our community. So that's seven people who thought they had the answer to their problem, and then we don't help them."

Pearson said a common misconception is that people seeking assistance from the housing authority have no income, but that is not the case. The average annual income of people in the voucher program is around $11,700.

"A large majority of them do work and have something going on in the community," he said.

Pearson said that when he started with the housing authority in 2002, 50 of the 219 units in Milton Young Towers were vacant.

"Today, we have close to 205 people on the waiting list to get into that building," he said. "Those are single-room apartments. We have people who are asking to go in there with two or three people in their household because they need a roof over their head."

He said funding for the programs is determined by how much was spent in the previous year. After a small "inflationary factor" is estimated, the city receives what is determined to be its fair share of the money appropriated by Congress. In the past few years, he said the appropriation has been "very close" to what was needed throughout the nation. No regional factors are taken into account.

"I wish it was done on a regional survey," Pearson said. "If they would regionalize looking at costs that are increasing - because we're seeing about a 20 percent increase in our rental costs from '08 to today - we'd be able to help more families than we are.

"But when rents are going faster than our increases, we're required to help less people."

Pearson said that one of the city's best hopes is a tax-credit project, which was requested a few months ago by the North Dakota Housing Finance Agency. Mike Anderson, director of the agency, said in a publication in October that he encourages community leaders to look at the creating of new housing as an investment.

"Housing yields returns and creates revenue at all levels," Anderson said. "Building a home takes a workforce. Paying those construction workers generates payroll taxes and gives them money to spend in the community.

"New construction bolsters local commerce when construction materials, household furnishings, appliances, and the like are bought locally. That also generates more sales taxes.

"And of course there are economic benefits that ripple through the community when new housing is built like the ongoing participation in the local economy by the new residents. Economic activity creates more economic activity."

The robust area economy is actually working against the housing authority's mission, since nationwide statistics show a depressed real estate and rental market, and funding is determined at a national level by Congress.

Ward County is by no means the only county facing these problems, as the Dickinson and Williston areas are also feeling the brunt of the effects of a rapidly growing workforce.

Pearson said that the state is exploring possibilities of coming up with funding to support additional housing, especially in the western part of the state, which is dealing with the oil boom directly.

"We're too big to get into rural development, but not big enough to get into CDBG (community development block grant) funds," Pearson said. "We're right in the middle."

 
 

 

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