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Developers Talking About Rental Housing

January 11, 2013

Paul Riemerman/Times-Record Employees of Six D Construction Monday demolish a building on Main Street, formerly the home of a professional dog grooming business. The building is one of a number of flood buyout properties purchased in Valley City to assist with permanent flood protection in the city.

Nobody has yet applied for a permit to build rental housing in Valley City, despite a current shortage of rental properties resulting from flooding protection buyouts.

David Schelkoph, city administrator for Valley City said he has informally heard developers talking about ideas for new apartment buildings, but permits haven’t been applied for.

Schelkoph said Valley City “is close to 100 percent occupancy in town with rental properties.”

David Andersen, Valley City building inspector said, “There has been a lot of talk by different contractors, but nobody has actually applied for a permit. Until somebody comes in and asks for a permit. A lot of people call my office every day and talk about what they would like to see happen.”

Andersen said a proposal to turn to City Audi into rental housing units is still alive, although on hold for the moment. Before the building can be purchased, a value must be set for the property. Because it is currently owned by Valley City, the base value is zero, and a usable value must be set. “An appraiser will try to look at it this coming week,” Andersen said.

Anderson said the audi building is sound, and he would rather see the structure saved that torn down. “It would be nice to see somebody do something with it – it is still a possibility for rental properties.”

Schelkoph said Valley City commissioners have created an economic development authority funding through a portion of sales tax revenues. The EDA, Schelkoph said, “can offer advice to any developer that comes to town.”

On Dec. 27, Schelkoph said City completed the first phase of flood protection buyouts of about 50 units in 32 buildings, short of original plans to buy out about 80 housing units.

Shelkoph said the city initially planned to buy out buildings with about 80 units in 35 buildings total, but “we decided to stop for 2012 at the end of November. “We initially planned to buy out all the property we wanted along Fourth and College streets, but we ran out of money after we bought the Lance Apartments.”

Schelkoph said from his perspective it was probably good to run out of money for the project, because three more apartment buildings with about 30 units were planned for the first phase of buyouts, which would have decreased the city housing supply by about 80 units..

Schelkoph said those three apartment buildings are located along Riverview Drive, “and have many residents.”

Schelkoph said losing that many rental units at one time could lead to a crisis in Valley City. “When too many people are out of their houses, it creates a housing crisis.”

Jennifer Feist, dof development for the Valley City-Barnes County Development Corporation, said HoThursday the community has experienced shortages of rental units in the past.

In 2006, Feist said, the development corp. participated in a multi-family housing program to encourage new construction.

As a result , Feist said, 48 new apartments were completed early in 2007.
Economic development efforts in partnership with the private sector are creating jobs.

“A percentage of the workforce will be people new to the community looking for rental units especially in the first 6 to 12 months.

“Once employment is established, homeownership is the ultimate goal. In addition, students and area residents continue to seek housing depending on their personal preferences and financial situation. Whether the Corporation engages in a housing program again is unknown. Our focus is the development of the I-94 Corridor and job creation in advanced manufacturing and technology. Close by, the Spiritwood development will add to that demand. That demand should and, I believe will, present opportunities for the private sector to respond.”

Feist said legislatively, the development Corp. is encouraging North Dakota to make any programs available statewide.

She said that existing financing programs through lenders, ND Housing Finance Agency or USDA/Rural Development may also be helpful.

Housing “is on the front burner for us. It is critical we have as many people living in Valley City/Barnes County as possible especially as a result of economic development efforts. That’s good for our schools, health care providers and everyone in the community.”

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