Grand Forks City Council members consider the question of building affordable homes
As local leaders continue searching for answers to the area’s housing shortage, an idea came up at the most recent Grand Forks City Council work session:
Should the city itself buy land and develop housing?
Most council members are not in favor of the idea, saying that it’s not the city’s place to intervene in the free market and compete with private developers.
“I don’t think the city should be in the business of buying and selling homes. It’s not what the city does,” council member Dana Sande said.
The idea came up at the work session as city staff explained to the council its long-term plan for infrastructure on the city’s west end, including some areas of planned residential development near the new north-side Walmart and Interstate 29.
Those plans for infrastructure to support residential development got the council talking about the housing shortage and eventually council member Tyrone Grandstrand asked, “(What if) we did the development?”
In an interview, Grandstrand said he supports the idea of the city buying land and developing it to ease the housing market.
Although the question originally stemmed from discussion of infrastructure at the edge of the city, Grandstrand said he is most interested in seeing the city buy and redevelop areas near downtown and UND, particularly near a public transit route.
This could happen if the city purchased old apartments that are falling apart, found somewhere for those residents to live temporarily, and built nicer apartment buildings that house more people more efficiently, Grandstrand said.
“If there isn’t enough housing being built, it makes sense for the government to step in and do something about that,” he said.
If the city did build housing in that way, he added, it would have to be smaller units closer together to keep the prices more affordable.
But there wouldn’t even be anyone available for the city to hire to build housing if it wanted to, Sande said, because local builders are already busy with their own projects.
There has been a sharp increase in housing development in the past year, especially for apartments, with building permits issued for 830 multifamily housing units in 2013, up from 292 in 2012, according to data from the city assessor’s office.
Like Grandstrand, council member Bret Weber said areas near downtown and UND are in need of better housing options, but Weber agreed with Sande, saying he does not think the city entering the private housing market was the right answer.
“I don’t think it’s the role of city government to become a landlord,” Weber said.
Council member Terry Bjerke is also against the idea of the city buying land for housing.
“We’d be nuts to do it,” he said. “The government has no place in the private housing sector. The free market is the free market.”
The best way the city can step in to help the housing affordability problem is to keep taxes, fees and utility rates down as much as possible, Bjerke said. “Why don’t we only do what we’re supposed to do?” he said.
The city has entered the housing market before.
In August 1997, the city broke ground on the Congressional First Subdivision, which was the beginning of the city developing affordable homes needed for flood recovery. The homes were eventually transferred to Grand Forks Homes, a nonprofit.
“That was a special case and something had to be done,” said council member Ken Vein, who was the city engineer and director of Public Works at the time of the Congressional First Subdivision. “The circumstances, of course, were so different back then,” he added.
That project received criticism, with some saying too many homes were built too quickly, according to Herald archives. Some of the homes were still unsold in 1999, leading the City Council to spend money offering buyer’s incentives.
If the city did decide to enter the housing market again, officials would have to look at what went wrong with the previous project, Vein said.
But at this time, Vein said, he doesn’t think the housing market needs that type of intervention by government. He would be open to the idea if circumstances called for it, but “I haven’t seen the data yet that would sway me,” Vein said.
Grandstrand said he knows that the city entering the housing market in 1997 was considered unsuccessful by some, but he maintained that the idea can work “if it’s done right.”
“There are so many good things that can come out of this,” he said. But, “For it to happen, you need a mayor that’s OK with it,” he said, adding that it would also take “some pushing from the public.”
Grandstrand, whose term on the council ends in June, said last week he plans to seek a meeting with Mayor Mike Brown on the idea of the city buying land to build affordable housing.
Brown was not able to be reached for comment this week, but Pete Haga, community/government relations coordinator spoke on behalf of the Mayor’s Office in saying that Brown would not support the city entering the private housing market at this time.
“There is an ongoing effort by the city to encourage development of affordable housing,” Haga said, but, “There are better ways (than the city entering the housing market) to be working with the developers and working with the market.”