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Minot Housing Authority is looking for local government support for its plan to sell 40 scattered housing units and replace them with a 72-unit complex in northwest Minot.
Ward County commissioners voiced concerns on Tuesday about shifting affordable housing from single-family and duplex housing to three-story apartment buildings but aren't scheduled to make a decision until their Sept. 19 meeting.
The housing authority is requesting to make a payment in lieu of property taxes during operation of the proposed low- to moderate-income apartments. The proposed payment plan assumes starting with a base of $100 per unit and increasing by 2% a year, while land taxes would continue to be paid in full.
Without a payment-in-lieu, about 50% of tenant rent would need to go to pay taxes, said Dan Madler, CEO for Beyond Shelter, Fargo, which is developing Engle Court Apartments largely through the sale of federal income-tax credits. Madler and Tom Alexander, executive director for Minot Housing Authority (MHA) met remotely with the commission Tuesday to provide details of the proposal.
Support is needed from the county, city and school district to capture the full benefit of the plan as requested. The City of Minot will act on the request Sept. 18, and the Minot School Board is expected to vote this Thursday.
Commissioner Jim Rostad, also a Minot school board member, raised concern about consolidating housing into a single complex in northwest Minot because schools in that part of the city already are at capacity. Beyond Shelter proposes to develop the 72 apartment units on seven acres on the east side of 16th Street, south of 30th Avenue.
"You're picking the worst place in town to put more elementary students because Lewis and Clark School up on North Hill is already full, and we've moved the boundaries so some of the kids up there are actually going to Longfellow School, which is down the hill, and Bel Air's absolutely full," Rostad said.
He said the plan could lead to the need for another elementary school, which isn't going to happen while taxpayers are funding a bond issue for the new high school.
Madler agreed the plan could put pressure on the school district.
"It is a matter of having that discussion because this is just one project of many that will be coming to that area as it continues to develop. What we are really looking to do with our project is meet the needs of affordable housing for families in the Minot-Ward County area," he said. "We have to step back and look at the big picture. What does the community need?"
The 40 houses and duplexes owned by MHA were built in 1979-80. Federal money for upkeep on the 40 units has been declining over the years, so for financial and efficiency reasons, the decision was made to reposition that public housing into Engle Court Apartments. The first 36 apartment units are targeted to become available in the fall of 2025.
Adding 72 units would provide 32 units beyond the existing 40 units that would be replaced. Madler said those extra units are needed to meet future demand, particularly with the potential of tighter housing once Minot begins experiencing an influx of workers with the Air Force missile update project.
Selling the 40 scattered units would put them on the tax roll. However, Commissioner Howard "Bucky" Anderson questioned replacing single-family houses with apartments.
"I'm thinking more about the social issues," he said. "I know it’s inefficient to have these spread out, but I believe that's better."
Alexander said current tenants may be able to purchase their homes in some instances.
"It's a great opportunity for first-time homebuyers, and we're hoping several of those families would be interested in purchasing," he said. The anticipation also is that landlords might purchase homes to retain them as rental properties, he said.
Rostad conceded the coming of the missile project will create housing shortages if not addressed in advance.
"That truly does concern me," he said. "I'm not sitting here absolutely opposed to this. I think a lot of things have to be considered, but I'm listening."
"We're looking to make the Minot Housing Authority stronger in the end so they can basically continue to serve Minot and Ward County in the future," Madler said. "We're looking to add some additional inventory and replace some existing infrastructure, and so when we look at it in total, we see more positive than negative."
Demand for affordable housing grows
Since 2014, the number of housing vouchers available in Ward County has increased from 550 to 850, according to Tom Alexander, executive director at Minot Housing Authority. MHA expects to receive another $218,000 in federal assistance for additional vouchers, which should help another 33 to 34 families, he said.
Alexander and Dan Madler, CEO for Beyond Shelter, outlined the need for affordable housing assistance to the Ward County Commission Monday.
Madler said the housing vacancy rate in Beyond Shelter's 275 units in Minot and Burlington has ranged from 4% to 6%, which is considered normal tenant turnover. He noted the Magic City Apartment Association last week reported a vacancy rate of 3.14% in the second quarter of this year.
"I would take that to be a tight market," he said.