Members of the Appropriations - Government Operations Division agreed to move $13,500,000 from the State Investment Fund (SIF) into the Housing Incentive Fund (HIF) to fund a new rent-stabilization program and authorized three full-time equivalent positions to support administration.

The agreement followed a presentation by David Flor, executive director of the North Dakota Housing Finance Agency (HIF agency), and questions from lawmakers about how the new program would relate to work currently performed by the Department of Human Services (HHS) under ARPA funds. "We would take it on. Because we think it's important," Flor said of the agency taking responsibility for rent-stabilization funding.

The committee debated staffing and delivery. Representative Pyle said the HIF approach would speed payments to landlords by routing public-facing applications through local nonprofits rather than the state: "the deployment of dollars will be faster to the landlords." Committee members and budget staff settled on one grant coordinator and two accountants (three FTEs total) rather than the four positions HIF originally requested.

The committee discussed how funding and positions would be carried and accounted for. Adam, the committee budget analyst, explained that the $13.5 million is a transfer between special funds and therefore does not appear as a conventional appropriation: the money would move from SIF into HIF and HIF would use a portion of that transfer to fund the authorized positions and operating costs. Adam also said roughly $60,000 of related operating expenses is expected per FTE.

Lawmakers pressed how the transfer would affect existing HHS activity. Connor Swanson of the governor's office said HHS began the rental assistance program in March 2022 and has spent about $150 million since 2021. He described a range of monthly payments that have fluctuated from roughly $400,000 in low months to about $1.6 million in March, and said the program primarily assisted households at or below 30 percent of area median income. Committee members noted HHS currently has roughly $5 million in ARPA funding that HHS is obligated to spend through Sept. 30, 2025; committee members agreed HIF would not take over HHS's remaining obligated ARPA balance.

Representative Meyer and other members asked the agencies to report back with a comparison of HHS administration costs and HIF estimated costs to administer the new program, and to clarify whether temporary HHS staff could or would be transferred. Flor said many HHS staff working the current program are temporary and that HIF planned to bill administrative costs to the rent-stabilization transfer and hire only as needed.

The committee directed staff to reflect the compromise staffing level (one coordinator, two accountants) in the budget numbers and to show the trimmed FTE operating costs on the long worksheet. Committee members left the $13.5 million transfer in the worksheet as a one-time SIF transfer and recorded the three FTEs and related operating costs as ongoing administrative funding for HIF.

The committee placed the program in the HIF agency's continuing appropriation framework and discussed an expected implementation ramp beginning July 1, recognizing HIF would not immediately be able to process applications at full scale.

Ending

Members said they support moving the funds to HIF while seeking additional detail on administration costs and on how HHS obligations will be completed or closed out. Committee budget staff will modify the worksheet to reflect three FTEs and related operating costs and will provide comparisons between HHS and HIF administration costs at a later date.