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The Minot Housing Authority is seeking local government support for its plan to sell 40 detached housing units and replace them with a 72-unit complex in northwest Minot.

Ward County commissioners expressed concerns Tuesday about converting affordable housing from single- and duplex housing to three-story apartment buildings but a decision is not scheduled until their Sept. 19 meeting.

The Housing Authority requires a payment in lieu of property taxes during the operation of the proposed low- to moderate-income apartments. The proposed payment plan assumes starting with a base of $100 per unit and increasing by 2% annually, while land taxes will continue to be paid in full.

Without the payment in lieu, about 50% of a tenant’s rent would have to pay taxes, said Dan Madler, CEO of Beyond Shelter, Fargo, which is developing the Engle Court Apartments largely through the sale of federal income tax credits. Madler and Tom Alexander, executive director of the Minot Housing Authority (MHA), met remotely with the commission Tuesday to present details of the proposal.

Support from the county, city and school district is needed to get the full benefit of the plan as desired. The city of Minot will act on the request on Sept. 18, and the Minot School Board is expected to vote on Thursday.

Commissioner Jim Rustad, also a Minot school board member, raised concerns about consolidating housing into one complex in northwest Minot because schools in that part of town have already reached capacity. Beyond Shelter is proposing to develop 72 residential units on seven acres on the east side of 16th Street, south of 30th Street.

“You’re picking the worst place in town to put more elementary students because Lewis and Clark on North Hill is already full, and we changed the boundaries so some of the kids there actually go to Longfellow School, which is down the hill, and Bel Air is completely full.” Rustad said.

He said the plan could lead to the need for another elementary school, which won’t happen while taxpayers are funding a bond issue for the new high school.

Madler agreed that the plan could put pressure on the school district.

“It’s about having that discussion because this is just one of many projects that will be coming to that area as it continues to develop. What we’re really looking to do with our project is address the affordable housing needs of families in the Minot Ward County area.” He said. “We have to step back and look at the big picture. What does the community need?”

The 40 houses and duplexes owned by MHA were built in 1979-1980. Federal funds for maintaining the 40 units have declined over the years, so for financial and efficiency reasons, the decision was made to reposition this public housing into the Engle Court Apartments. The first 36 residential units are scheduled to become available in the fall of 2025.

Adding 72 units will free up 32 units beyond the existing 40 units that will be replaced. These additional units are needed to meet future demand, especially with housing likely to tighten once Minot begins to experience an influx of workers on the Air Force missile modernization project, Madler said.

Selling the 40 separate units will put them on the tax roll. However, Commissioner Howard “Bucky” Anderson questioned replacing single-family homes with apartments.

“I think more about social issues” He said. “I know it’s ineffective to post these things, but I think this is better.”

Current renters may be able to afford their homes in some cases, Alexander said.

“It’s a great opportunity for first-time homebuyers, and we hope many of those families will be interested in purchasing.” He said. There is also an expectation that landlords will buy homes to keep as rental properties, he said.

Rustad acknowledged that the advent of the missile project will create a housing shortage if it is not addressed in advance.

“This really worries me.” He said. “I’m not sitting here completely opposed to that. I think there’s a lot to take into account, but I’m listening.”

“We look forward to ultimately making the Minot Housing Authority stronger so they can continue to serve Minot and Ward County into the future.” Madler said. “We’re looking to add some additional inventory and replace some existing infrastructure, so when we look at it overall, we see more positive than negative.”

Demand for affordable housing is growing

Since 2014, the number of housing vouchers available in Ward County has increased from 550 to 850, according to Tom Alexander, executive director of the Minot Housing Authority. MHA expects to receive another $218,000 in federal aid for additional vouchers, which would help 33 to 34 more families, he said.

Alexander and Dan Madler, CEO of Beyond Shelter, explained the need for affordable housing assistance to the Ward County Commission on Monday.

The residential vacancy rate at Beyond Shelter’s 275 units in Minot and Burlington ranged from 4% to 6%, which is considered a normal tenant turnover rate, Madler said. He pointed out that the Magic City Apartment Association announced last week a vacancy rate of 3.14% in the second quarter of this year.

“I would consider that a narrow market.” He said.