Disaster Recovery Funds Affordable Burlington Willows Townhomes in Ward County, North Dakota

Disaster Recovery Funds Affordable Burlington Willows Townhomes in Ward County, North Dakota

During the summer of 2011, the Souris River in North Dakota flooded. On June 22, the floodwaters overtopped the levees in the small town of Burlington in Ward County, inundating large sections of the Souris River Valley. The floodwaters did not begin to recede until mid-July, and when the flood was over, more than 4,000 housing units in Ward County had been damaged or destroyed. The disaster struck during an ongoing housing shortage in the region; the Bakken oil boom that began in North Dakota and Montana in 2008 caused a massive influx of energy industry workers. Ward County was one of the communities that experienced the largest rise in employment, gaining more than 3,000 jobs from 2007 to 2011. To help address the housing crisis that was exacerbated by the flood, the state allocated $8.95 million in Community Development Block Grant Disaster Recovery (CDBG-DR) funds to Ward County in 2012. One of the projects that received disaster recovery funding was Burlington Willows Townhomes (the Willows), a 40-unit affordable development that opened in May 2016.

Building in the Aftermath of the Souris River Flood

In late 2012, the De Sour Valley Economic Development Corporation (DSVEDC) purchased 25.96 acres of land on Riverwood Drive in Burlington to develop sorely needed affordable housing. In search of a developer, the city and DSVEDC approached the Fargo-based affordable housing developer Beyond Shelter, Inc. (BSI), which was partnering with the Minot Housing Authority (MHA) on an affordable development in nearby Minot, the county seat. BSI and MHA agreed to co-develop the site. The city of Burlington used $400,000 of CDBG-DR funds to purchase 6.77 acres of the property from DSVEDC, which it then sold to BSI for $1. BSI used 3.92 acres of the purchase for the Willows and divided the remaining land into 20 lots for the construction of 32 houses.

In mid-2014, Ward County began work to install necessary infrastructure and raise the elevation of the site above the level of the 100-year flood zone. The project site was immediately adjacent to the Souris River, so to prevent damage from another flood, the county brought in approximately 2.7 million cubic feet of additional soil to raise the site’s elevation 3 to 4 feet. No other flood mitigation efforts were needed, although raising the elevation required the transport of approximately 6,000 truckloads of filler earth to the site, delaying construction of the townhomes. Ward County used $2.92 million of state-awarded CDBG-DR funds to install infrastructure such as streetlights, water and sewage lines, and blacktop streets, which also supported BSI’s nearby development of single-family and twin-home lots. The infrastructure and flood mitigation tasks were completed in November 2014, and construction of Burlington Willows began in spring 2015.

Affordable Workforce Housing at the Burlington Willows

The $8.26 million Burlington Willows development was dedicated on May 31, 2016, on the fifth anniversary of the day the flood sirens first sounded, signaling the beginning of the disaster. The 40-unit development is composed of 5 buildings, each with 8 two-story townhouses. The units consist of 26 two-bedroom, 12 three-bedroom, and 2 four-bedroom units. BSI and MHA co-own the property through a limited liability corporation, the Burlington Willows, LLC, and MHA manages the property. A significant portion of the development costs were covered through a $3.29 million CDBG-DR award. Another $3 million was awarded by the North Dakota Housing Finance Agency’s Housing Incentive Fund (HIF). The remaining development funds came from a $1.08 million permanent loan from Bremer Bank and BSI’s deferral of the $884,000 developer fee.

Eligible tenants must earn no more than 80 percent of the area median income (AMI), with eight of the units reserved for individuals making no more than 30 percent of AMI. The development has eight project-based housing choice voucher units administered by the Minot Housing Authority. As a condition of the HIF award, eight units are reserved for certain members of the workforce, termed Essential Service Workers — individuals who are employed by a government entity including the city, county, or school district, or by a medical or long-term care facility. An additional eight units are accessible to wheelchair users.

Each unit includes an attached single-car garage and a low-fee, coin-operated washer and dryer. The development was designed to meet the requirements of the International Code Council/American Society of Heating, Refrigerating, and Air-Conditioning Engineers 700-2015 National Green Building Standard, including energy-efficient windows and building materials with low levels of volatile organic compounds. Because the Willows was expected to accommodate families with children, there is a playground on the site.

Lease-Up

When the Willows project was planned in early 2013, Ward County was facing a housing shortage, and the development was expected to lease up quickly. When the development opened in May 2016, however, job loss in the region had drastically decreased demand for housing. Leasing was slow, and more than a year later, 13 of the Willows’ units are still vacant. “We opened during the oil market downturn,” explains Dan Madler, chief executive officer of BSI. “Due to demand from the energy sector, many apartment units were produced in Minot, so now there is an excess of rental units.” In the wake of the Souris River flood in 2011, Minot’s vacancy rate was essentially 0 percent. In late 2017, the vacancy rate was between 8 and 10 percent.

Of the 27 currently occupied units at the Burlington Willows, half are occupied by families with young children and half are occupied by seniors over age 55. Madler attributes the development’s unexpected popularity with seniors to the availability of accessible units, which allow mobility-impaired individuals to age in place.

Evaluating Evolving Housing Needs

Although the general demand for rental housing in Ward County has fallen since the Willows was planned due to reduced demand from energy-sector workers and market saturation following flood recovery efforts, Madler reports that some populations in the area are still underserved. As of late 2017, BSI was investigating the need for permanent supportive housing in Minot for veterans and individuals experiencing homelessness. BSI plans to embark on another partnership with MHA to possibly develop a multiunit project that will operate on the Housing First model.