Fargo Commission Approves Tax Break for Apartment Project

The city greenlit a 10-year tax exemption for a new 229-unit housing development on 45th Street South.

Updated on Oct. 27, 2026 in People

Isometric editorial illustration showing stylized high-density residential building blocks in a structured urban layout. — The Fargo City Commission voted 4-1 to approve a 10-year tax exemption for the $61.6 million COVE Living housing project. AI Illustration. Upload story photo >

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Should your local government offer tax exemptions to developers for new housing projects?

The Fargo City Commission voted 4-1 to grant a 100% tax exemption to the $61.6 million COVE Living apartment project. This decision aligns with a new city policy aimed at redeveloping obsolete commercial properties.

Why it matters

The city aims to revitalize underutilized commercial sites by offering tax incentives for housing projects that increase density. The new policy mandates that developers include affordable housing units to qualify for these financial benefits.

The COVE Living project represents a $61.6 million investment and requires 5% of its 229 units to be reserved for households at or below 80% of the area median income. The city expects to collect $166,068 in annual taxes from the site once the exemption expires.

The players

Fargo City Commission

This is the primary governing body responsible for setting local policy and approving major development projects within the city.

Michelle Turnberg

She serves as a city commissioner who provided the sole dissenting vote against the apartment tax exemption.

Erika Anderson

She is the incoming assistant city administrator tasked with supporting municipal operations.

The details

The commission updated its Payment in Lieu of Taxes program to include strict geographic boundaries and housing density requirements for future applicants. Commissioner Michelle Turnberg cast the lone vote against the exemption for the project at 200 45th St. S.

The Fargo City Commission approved the tax exemption on October 26, 2026.
Erika Anderson will assume her role as assistant city administrator on November 30, 2026.

Market Landscape

The city is utilizing the Payment in Lieu of Taxes program to aggressively shift underutilized commercial zones toward residential density. This strategy positions Fargo to compete for urban development investment by incentivizing private builders to modernize aging infrastructure.

Residents may see an increase in housing supply as older commercial buildings are replaced by apartment complexes. The inclusion of income-restricted units in the new policy also aims to improve housing accessibility for lower-income households in the area.

The takeaway

City planners are increasingly using tax exemptions to solve commercial vacancy issues by driving residential growth. Property developers in the region should review the new income-restricted unit quotas before proposing future projects.