June 26--The Jamestown /Stutsman Development Corp. Executive Board heard presentations on incentives for affordable housing Wednesday at a special meeting. The board lacked a quorum and could not take any action during the meeting.
Lori Gabriel, commercial loan officer for the Bank of North Dakota, said the Flex Pace Affordable Housing Program was relatively new with 12 projects in North Dakota under construction. None were complete and occupied. The JSDC does not currently participate in the program.
MetroPlains has applied for the program for the Jamestown Court Row Homes project at the old Essentia Clinic location. Without a quorum to act on participation in the program, the JSDC was not able to act on the application.
The program provides $25,000 of Bank of North Dakota interest buy down for every unit dedicated to affordable housing. This effectively reduces the monthly loan payment on the property. The program is limited to multi-family dwellings and includes an annual review process to make sure rents are at or below the affordable limits. The program requires 35 percent participation by a local economic development agency.
"The million-dollar question is what is the affordable rent number?" said Kelly Rachel, president of Unison Bank. "Then you can calculate if it makes sense. The developer has to determine if the reduction in interest is worth the reduction of rents they receive."
Gabriel said the definition of affordable rent in each community is left up to local agencies.
"Every community does it differently," she said. "Some use 70 to 80 percent of the market price of like apartments."
Dave Klein, executive director of the Stutsman County Housing Authority, said affordable housing is often defined as 30 percent of gross income. Currently the median gross income for a family of four in Stutsman County is $62,500 which would result in an affordable rent of about $1,600 per month.
Gabriel said the intent of the program was to increase the supply of apartments in order to reduce costs.
"I think every community has a shortage of housing and particularly affordable housing," she said. "Apartments need to be overbuilt a little bit in order to get the rents to come down."
Sun reporter Keith Norman can be reached at 701-952-8452 or by email at email@example.com
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