Housing in Grand Forks is ‘unaffordable,’ so now what?
The Grand Forks group tasked with examining the city’s housing issues has identified the problems that have led to a shortage of affordable homes. Crafting and recommending solutions to those problems is the next challenge.By: Brandi Jewett, Grand Forks Herald
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The Grand Forks group tasked with examining the city’s housing issues has identified the problems that have led to a shortage of affordable homes.
Crafting and recommending solutions to those problems is the next challenge.
The Blue Ribbon Commission on Housing ended its first phase of meetings on Nov. 14 when it released its Grand Forks Housing Snapshot report, detailing the city’s biggest housing problems and factors that contribute to them.
“I’m very pleased to see what’s come out of the commission’s work,” Mayor Mike Brown said. “If you can see the problem then you can see the solution.”
“It’s best to address the issue with information instead of speculation,” he added.
Brown formed the commission to examine the city’s housing market and to create recommendations for problems, such as the city’s short supply of affordable housing, high rent prices and a lack of land available for development.
The commission met for the first time on Aug. 19 under co-chairmen Dana Sande, a City Council member, and Michael Bergeron, chief financial officer for Ralph Engelstad Arena.
Several members represent populations affected by major housing issues, including college students, senior citizens, military personnel and low-income people, while others represent various stakeholders within the city.
Some members do have financial interest in the recommendations proposed by the committee. These people include local land developers, homebuilders, property managers, engineering firms and real estate agents.
In the past three months the group has brought several housing trends to light, including evidence allowing the city to officially classify its housing market at “moderately unaffordable.”
The city’s 2012 median home price is $169,900. In comparison, the median home price in Fargo is about $145,000.
In order to be considered “affordable” housing should be three times the cost of the median income. Grand Forks’ median income is $47,400 meaning an affordable home would be about $142,000.
The discrepancy between the median home price and the affordable home price creates a market low-income people may have trouble finding housing in, according to the commission’s report.
About a quarter of the city’s households earn less than $24,999 each year, meaning they would be limited to housing under $75,000.
“Income is below average in this community,” said Terry Hanson, director of the Grand Forks Housing Authority, during the Nov. 14 commission meeting. “There are poor people living in Grand Forks, believe it or not.”
The city’s median income is currently 92.5 percent of the national median income, which is about $51,000 per year. This is an increase from 2005, when the city’s median income was 88.7 percent of the national median.
The findings for renters aren’t any more optimistic. As of 2010, more than half of Grand Forks renters spend 30 percent or more of their income on housing costs. In Fargo and Bismarck, these numbers are 44 percent and 43 percent respectively.
Grand Forks County also recorded higher median rents than Cass and Burleigh counties in 2011.
Between 2000 and 2010, median rent payments in Grand Forks increased by about 32 percent or by $155 per month.
The future
Armed with this report, commission members can now begin determining the city’s housing priorities.
“We all agree that we are in a housing crisis,” said Meghan Marshall, an attorney who represents citizen interests on the commission. “People shouldn’t be having this much trouble finding homes.”
When it comes to building more affordable homes, discussion has focused on relieving some costs for developers and homebuyers. Ideas included creating development incentives, using grant money to subsidize construction, creating venture capital funds and allowing construction costs to be deferred for predetermined periods of time.
Several members have expressed concern on how the incentives would be structured for developers.
“There are dangers going down that path without safeguards in place to make sure that the ultimate goal of affordable housing is met,” Marshall said.
She noted she wants to be sure home prices would come down instead of just increasing profit margins for developers if incentives were available to them.
As for renters, more than 900 new units are expected to become available within the next two years. Whether or not this will alleviate high rent payments remains to be seen.
During the Nov. 14 meeting, commission member and property manager Tom Bures said hotel prices didn’t go down when a batch of new ones were built in the city, and he doesn’t expect new construction to decrease apartment prices.
“Our prices are comparable to Fargo but they will climb to us before we drop to them,” he said.
Other members think the market could turn itself around without intrusion from the city.
“Nothing coming out of this (report) says the market is failing,” said Pat Hanson, a UND representative. She said the committee should be careful not to skew the market with programs such as incentives.
The commission has two more meetings until its time concludes and it presents the city with its final recommendations.
“Our mission is to provide suggestions,” Terry Hanson “We’ll do that. Whether the city and community accept them is another question.”
Call Jewett at (701) 780-1108; (800) 477-6572, ext. 1108; or send email to bjewett@gfherald.com.
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