Development of new Grand Forks homes depends on a few landowners

• Map of major landowners in south Grand Forks

Map of major landowners in south Grand Forks

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If Grand Forks’ problem is not enough housing, its solution depends on a few people who control the land on the city’s outskirts.

“We’re just running out of land that’s platted and plotted,” said Dana Sande, a City Council member.

Sande is co-chairman of Grand Forks’ Blue Ribbon Commission on Housing, a group that has been gathering information and discussing actions to address the area’s housing market.

Its work so far has found that the area’s supply of homes is too small and more expensive compared to comparable cities. A report released this month on the study’s findings states land ownership is factor.

“New development is constrained by geography and because relatively few landowners hold developable land adjacent to the city,” it stated.

In Grand Forks, it comes down to two landowners who control property on the south end, where virtually all new housing is developed.

Concentration

Natural and artificial barriers around Grand Forks have funneled new growth mostly to the south. The industrial character of the north side has blocked housing expansion there. The Red River is to the east and only a few neighborhoods have developed west of Interstate 29.

To the south, the Metropolitan Planning Organization has identified a zone between the city limits and 62nd Avenue South as the area likely to absorb growth until 2040.

According to county records, the land between the interstate and Columbia Road is controlled by Guy Useldinger, a prominent farmer and developer, and his family.

East of Washington Street the land is largely owned by Johnson Farms, based in Walhalla, N.D., and has been developed by Tim Crary, the owner of Prudential Crary Real Estate who has family ties to the Johnson family. Crary is also a member of the Blue Ribbon Commission.

Neither Useldinger nor Crary responded to requests to be interviewed.

Of the 94 single-family housing starts in Grand Forks by mid-November, 81 were on the city’s south end, according to records with the city Inspections Department. Many of them were in the Southern Estates development, launched after the 1997 flood in part by the Useldinger family, including 17 lots directly owned by Guy Useldinger’s development company.

Ten starts this year were owned or built by Crary Development.

Useldinger has drafted a preliminary plan to develop his land south of the 32nd Avenue commercial corridor and east of the interstate into residential and commercial properties.

In the northwest part of the Grand Forks, planning officials are hoping that plans for a new Walmart will encourage more housing developments south of Gateway Drive and west of 55th Street. That area has been mostly lacking general retail services for north side neighborhoods.

The vacant land adjacent to the neighborhoods is owned by famer Ronald Adams and members of his family.

Adams said residential development on his land was a possibility, but he had no plans yet. The area was the site of many home starts to replace houses destroyed after the flood, and Adams said growth there could help the housing market now.

“It’d take some pressure off the south,” he said.

However, in the past year, only two housing starts were in the northwest side. Both were built as low-to-moderate income housing in conjunction with the Grand Forks Housing Authority.

New options

In past, the city has been content to let the few landowners develop their property into subdivisions to meet housing needs as the city has grown. But as demand has grown faster than supply, there are signs city leaders are no longer content with a small number of owners developing property at their own pace.

Discussions during meetings of the Blue Ribbon Commission have tossed around ideas for incentives for landowners to develop their property, such as easing the burden of property taxes and infrastructure special assessments paid by landowners until home buyers take possession of new houses.

But among the carrots considered, there have also been some sticks.

Sande said he wanted more scrutiny of how vacant land is assessed and taxed. Undeveloped land next to commercial and residential is usually classified as agricultural land outside the city limits, and so taxed at a lower rate, even in cases where it is surrounded by development. Parcels of that sort are scattered around the city.

If the land were treated and taxed as the prime real estate that its owners often market it as, they could be less willing to leave their property undeveloped, Sande said.

“If it walks like a duck and quacks like a duck, then it’s not ag land,” he said.

Another option mentioned by Sande as well as City Council President Hal Gershman is leapfrogging, in other words going around landowners and allowing development of land not contiguous with the city limits. It’s a practice that zoning and engineering officials have not supported in the past because of the high cost of extending infrastructure.

“You skip on to the next landowners, because there’s always someone who wants to develop their property,” Sande said.

Market intervention

Those involved with discussions of housing have avoided placing too much blame on landowners for the current housing market.

“Landowners are financially motivated to maximize their profits, as any good business person should be,” said housing commission co-chairman Michael Bergeron. “That doesn’t make them bad people.”

But he questions why land is mostly developed piecemeal rather than large subdivisions.

“The city has not approved a significant PUD (planned unit development) in years,” he said.

City Planner Brad Gengler said the last large PUD was Southern Estates, using about 300 acres from 40th Avenue and 62nd Avenue and Washington Street and Columbia Road. He said Useldinger’s plans for the southwest side could be 250 to 300 acres.

But even if large tracts of land were subdivided and zoned, construction time and expense would still mean housing developed at the same pace, said Steve Adams, an agent for Prudential Crary and a planning and zoning commissioner.

“We just don’t go fast in our world,” he said, noting that it took about 14 years to use all of Southern Estates.

Developers might just be cautious, too.

They have overextended the supply of houses in the past and could be wary of doing so again, said Skip Greenberg, a broker with Greenberg Realty and a member of the Blue Ribbon Commission.

“It’s not like they’re trying to control the market,” said Greenberg, whose family agreed to sell some of its land in southwest Grand Forks to Guy Useldinger.

Jon Miskavige of JM Homes, the most active home builder in Grand Forks this year, said the city had a shortage of lots because the costs of development are high and landowners do not want to pay taxes and specials on property before it is sold to home buyer.

“We have zero inventory for land in Grand Forks right now and that is because of the fear on both ends of those, on Tim and Guy, that … if you don’t develop those lots it’s like a $100,000 bill every year,” he said during the first meeting of Blue Ribbon Commission. “They’re only bringing in what can be consumed in a given year.”

More landowners could change the market but so far the Blue Ribbon Commission and others have not said exactly how.

“I think it’s a factor, but don’t know how to quantify the factor,” Gengler said.

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