Jill Schramm/MDN City of Minot Principal Planner John Van Dyke addresses the Minot City Council Tuesday with a presentation on arrested developments for housing in Minot.

Hundreds of residential lots have been platted in Minot over the years, only to languish as development stalled.

The Minot City Council on Tuesday approved short-term tax relief to builders and future homeowners to encourage construction on these lots and help meet future housing demands.

The City of Minot has identified 1,701 platted, undeveloped lots, of which only 346, or about 20%, are shovel-ready with infrastructure such as water, sewer and paved roads.

The city is calling these properties  “arrested developments,” and hopes a tax incentive might get them active again. The council approved resolutions for builder’s and homeowner’s tax exemptions that exempt the first $150,000 of home value from taxation for two years for homeowners and for the first year of construction for builders. A builder is eligible for up to 10 exemptions on separate homes.

The exemption program is to be in place over the next 10 years for builders and 11 years for homeowners, beginning March 1 of this year.

The city previously had offered the homeowners program as a two-year property tax exemption on the first $75,000 of improvements. The program was discontinued after the 2011 flood.

Most of the arrested developments in Minot are in northwest Minot, Principal Planner John Van Dyke told the council. Northwest Minot has 200 shovel-ready lots and 699 lots that need infrastructure. Southeast Minot, where 55th Crossing is located, has 146 shovel-ready lots and 593 that need infrastructure. Southwest Minot, where Southwest Crossing is located, has 63 lots that need infrastructure.

Van Dyke said even shovel-ready lots may not be easily developed because of pricing. Many of the properties were purchased at high prices during the oil boom, and landowners are reluctant to sell at a loss.

“Some of the landowners may be under at this time, and they’re just patiently waiting until they can sell it at a break even or make a marginal profit,” Van Dyke said. “Some of the lots are for sale but they need to be sold as entire blocks or possibly the entire subdivision. Typically, builders are not going to have that kind of capital to acquire that many lots.”

He added there have been 450 housing unit construction starts over the course of 2020-2022. The number of new single-family housing starts rose from 68 in 2018 and 67 in 2019 to 85 in 2020 and 84 in 2021 before dropping to 42 in 2022. Multi-family projects are typically fewer in frequency and larger in scale, such as the EPIC projects with Blu on Broadway, M By EPIC and The Tracks.

Van Dyke noted the city’s draft comprehensive plan anticipates Minot’s 2020 population increasing by 14,500 residents by 2040.

“This equates to the need for 6,600, give or take, housing units by 2040,” he said. “So on average, that means we need 300 housing units a year between 2020 and 2040.”

City figures show 177 single-family, twin home or multi-family units were added in 2020, 150 units in 2021 and 124 units in 2022.

The council unanimously approved the resolutions to establish the tax breaks in Minot.

“I love the fact that we are doing this,” council member Scott Burlingame said. “I think that being able to promote potential building on sites that are already in our existing infrastructure is smart development. It’s one of those things that can help bring new housing on without increasing the cost of providing those services.”

“This is a great tool that our community can use to incentivize, just infill into shovel-ready developments,” council member Paul Pitner said. “And again, see some of those ‘grow the pie,’ as we say, to lessen the burden on the taxpayer.”

The council also agreed to pursue a 20-year housing needs and market analysis study. Council members voted to cap the study cost at $150,000 and advertise for consultant proposals.