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Amid North Dakota housing shortfalls, some hope for renewed efforts

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  Published in House and Home on Tuesday, September 2nd 2025 at 8:42 GMT by inforum
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Amid North Dakota’s Housing Shortfalls, New Efforts Offer a Ray of Hope

The state of North Dakota has long struggled with a severe shortage of affordable housing, a problem that has been magnified by a rapid influx of residents in metro areas such as Fargo, Bismarck, and Grand Forks. A recent article in InForum—“Amid North Dakota housing shortfalls, some hope for renewed efforts”—examines the roots of the crisis, the economic pressures that have intensified it, and the emerging policy initiatives that may finally give the state a path toward relief.

The Scale of the Problem

According to the InForum piece, North Dakota’s housing crisis is a complex web of factors. Housing supply has lagged behind a steady rise in population—particularly in urban centers where job growth in technology, healthcare, and higher education has spurred a migration of workers and their families. In 2021 alone, the state added roughly 4,500 new residents, a surge that has left many households scrambling for homes that can accommodate their incomes.

The article notes that the North Dakota Housing Trust Fund (NDHTF), a state-managed reservoir of money earmarked for affordable housing projects, has been underutilized. The Trust Fund, created in 2016 and backed by federal funding, has only provided a fraction of the $1.8 billion needed to meet current demand. A key statistic highlighted is that only 12% of new construction in 2022 was designated as affordable housing—an alarmingly low figure compared with the 30% benchmark set by the Department of Housing and Community Development (DHCD).

The shortfall is not just a numbers game. A North Dakota Housing and Finance Corporation (NDHFC) report cited in the article describes a steady rise in rent prices, with some cities reporting an average increase of 5% per year. While incomes have risen modestly, the growth in housing costs has outpaced wage gains, leaving a growing segment of the population unable to secure stable housing.

Why the Shortfall Persisted

The article delves into the regulatory and market dynamics that have slowed new construction. Zoning ordinances in many counties restrict density, and the Bismarck–Mandan area, for instance, still has strict single-family zoning that excludes multifamily units. In addition, developers face a maze of permitting requirements that can extend the timeline from initial design to occupied units by up to 18 months.

The InForum piece also references a 2023 study by the North Dakota State University (NDSU) Center for Housing and Community Development that found that 68% of local municipalities have “unnecessary” or “outdated” ordinances that hamper affordable housing. The study argues for a statewide review of zoning codes to streamline the approval process.

Compounding these regulatory hurdles is the financing challenge. Traditional lenders have been hesitant to back high-density projects due to concerns about market viability in a relatively small state. However, the article points out that federal programs, such as the HUD Low-Income Housing Tax Credit (LIHTC), are still available, yet many developers have not accessed these funds, citing bureaucratic complexity.

Renewed State‑Level Efforts

Against this backdrop of systemic obstacles, the InForum article highlights several new initiatives that could shift the trajectory.

1. Expanded Housing Trust Fund Allocation
   The state legislature, in a recent budget session, approved a $30 million increase to the NDHTF, raising the available capital from $45 million to $75 million for the next fiscal year. The article quotes State Representative Karen Brown, a key sponsor of the bill, who says, “We’re finally giving the Trust Fund the resources it needs to match the demand in our growing communities.”

2. Statewide Zoning Reform Pilot
   A new pilot program, overseen by the Department of Housing and Community Development (DHCD), will roll out “flexible zoning” in ten pilot municipalities. The DHCD plans to test zoning adjustments that allow mixed‑use and higher‑density projects in select areas. Representative Brown notes that the program “is designed to reduce permitting times and create a more business‑friendly environment for developers.”

3. Housing Finance Reform
   The state’s Housing Finance Corporation will now receive an additional $12 million to create a low‑interest loan program for developers of affordable housing. This move is aimed at bridging the gap between project costs and the limited availability of federal LIHTC funds. “We’re making it easier for developers to get the capital they need,” says Housing Finance Commissioner David Jensen.

4. Community‑Based Development Partnerships
   The article reports that the state is encouraging partnerships between developers and non‑profit housing agencies. In a recent announcement, the North Dakota Housing Authority (NDHA) will offer a $2 million grant to any project that includes a community‑owned, cooperatively managed building. This approach aligns with the NDSU study’s recommendation to involve residents in the planning process.

A Look Ahead

While the article acknowledges that these new measures are a positive step, it also cautions that the state must remain vigilant. The InForum piece stresses the importance of monitoring the implementation of zoning reforms to ensure that the flexibility does not open the door to “uncontrolled densification” that could undermine existing neighborhood character. Likewise, the new financing mechanisms will need to be evaluated for their long‑term impact on housing affordability.

In closing, the article portrays a state that, despite a painful history of housing under‑provision, is finally taking concrete steps to address the crisis. The combination of increased funding, regulatory reform, and innovative financing models provides a multi‑pronged strategy that could, if executed well, alleviate the pressure on North Dakota’s growing families and foster a more inclusive, sustainable housing market.