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Build it; they will come

North Dakota State Roundup

January 1, 2006

Build it; they will come

A new state law has sparked middle-market housing demand in a market you might not expect: small towns.

Until recently, North Dakota did not allow cities to issue bonds to build local housing. Such a practice is common in Minnesota and South Dakota, where cities authorize housing authorities to provide and build (and often manage) rental housing for low- and moderate-income households.

A state law passed last year allows North Dakota cities smaller than 5,000 to form housing authorities and build moderate-income housing. The law went into effect last August, and as of early November, at least 13 communities had projects in the works.

Demand reportedly is coming from seniors living in large, mostly empty houses. Local officials have complained about the program because it creates housing that is exempt from property taxes. According to the law's sponsor, Sen. Robert Eberle, the intent of the new law is for housing authorities to sell properties to private owners once the debt has been paid down far enough to attract private investors, at which point properties would revert back to property tax rolls.

Ronald A. Wirtz


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