ND study: Affordable housing not so affordable in the state; renters especially hard hit

State News

Despite a strong economy and low unemployment in state, the cost of housing is an issue for many North Dakotans, especially renters and those earning low incomes.

In a study of single and multifamily housing affordability, the North Dakota Housing Finance Agency found rising costs for new and existing homes and rental units, along with costs associated with COVID-19, are forcing people to spend more of their income on housing expenses.

“A home is affordable when 30 percent or less of a household’s earned income is spent on housing expenses,” says NDHFA Executive Director Dave Flohr. “Households that put more than 30 percent toward housing are cost-burdened.”

An American Community Survey estimates 14 percent of North Dakota’s homeowners paid more than 30 percent of their income for housing expenses in 2018.

At the same time, 39 percent of North Dakota renters were spending more than 30 percent of their income on housing.

“A large segment of North Dakota’s renter population works in the Accommodations and Food Services industries, the state’s lowest wage occupations,” says Flohr. “If a household is earning minimum wage, they have to work 89 hours per week to rent what is considered to be an affordable apartment.”

The fair market rent for a two-bedroom apartment in North Dakota is $841, according to the U.S. Department of Housing and Urban Development.

According to the North Dakota Housing Finance Agency report, to afford that level of rent and utilities without being cost burdened, a household must earn $2,804 a month.

The report also notes more than half of existing homes on the market in North Dakota had a sale price above $300,000 in September. Meanwhile, due in part to the pandemic, the cost of materials, labor, land and utilities for new home construction means few homes are being built that can sell for $250,000 or less.

The report says 1 in 10 North Dakotans were living below the poverty line before the COVID-19 pandemic hit. And while the report doesn’t estimate the number living below the poverty line after the pandemic started, it does say costs associated with the virus are making housing options for those earning low incomes even more challenging.

“COVID-19 is exacerbating the housing issues vulnerable populations face. More resources are needed to ensure every North Dakotan has a safe, accessible and affordable place to call home,” says Flohr.

The report estimates North Dakota has a shortage of 13,000 affordable rental units for extremely low-income households.

You can download and read the full report here.

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