Dalrymple’s Low Income Housing Scheme Belly Flops

Corral Creek Oil

North Dakota Governor Jack Dalrymple, much like his predecessor John Hoeven, has long been seen as the sort of leader who isn’t exactly a believer in free enterprise. Dalrymple, like Hoeven, believes in an economy driven by government “investment” in the form of a myriad of economic development schemes.

So it wasn’t at all surprising when Dalrymple sought to address western North Dakota’s housing shortage, brought about by an oil boom-driven demand spike, by creating a government fund to subsidize development of low-income housing. But to keep this fund from being a total sop to developers, the idea was to have private sector interests plop money into the fund so that it could, in turn, be used for low-interest loans to developers building low-income housing.

How has it worked out? Not great. Despite the announcement of a $100,000 contribution to the fund today, it is still $3.7 million short of its year-end goal.

It’s not surprising that this didn’t work. After all, there’s already plenty of market incentive in western North Dakota to build housing. The rents in the west, as we’ve heard endlessly from media reports and anti-oil activists, are too damn high. But high rents mean there is still plenty of room in the marketplace for housing to be built.

The surest way to bring down those rents is to remove obstacles to housing supply. Rather than asking companies to give away money to development (and the idea of the government shaking down the state’s businesses for contributions is another topic for discussion), the governor should have focused on easing what red tape may have been unnecessarily restricting construction. The governor also could have pushed back against local moratoriums on man camps, and silly policies such as the restrictions on living in campers in some areas.

Those policies took temporary housing options off the table, and only intensified an already bad housing situation. The governor should have spoke out against the policies. Instead he chose this boondoggle, and to the surprise of nobody, it has failed.

Perhaps Dalrymple will learn from this lesson. Sometimes the best course of action isn’t aggressive government policy aimed at directing private sector investment, but rather an effort to get the government out of the way of the free market.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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