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America's "Black Gold" Rush Is Leading To Soaring Homelessness
Lured by the promise of jobs created by the oil and gas boom, unemployed people are flocking to North Dakota en masse. This is heralded by many in the mainstream media as great news - labor mobility at its best - however, there is a darker side: rents are surging and finding a place to live at any price is difficult. As Reuters reports, amid all the boomtime plenty, however, is a housing affordability crisis. North Dakota saw a 200% jump in homelessness last year, the biggest increase of any state - "people are coming because it's widely publicized that we have jobs, but it's not widely publicized that we don't have housing."
"Homelessness is a quickly growing problem in North Dakota, which hasn't received the attention it deserves," said Heitkamp in a statement.
Amid all the boomtime plenty, however, is a housing affordability crisis. North Dakota saw a 200 percent jump in homelessness last year, the biggest increase of any state. There are now 2,069 homeless people in the state of 699,628, according to data from the U.S. Department of Housing and Urban Development. That translates into 28.6 homeless people per 10,000. The national average is 19.
Williston is perhaps the most extreme example of a phenomenon that researchers say has followed frackers across the country as the shale boom draws large numbers of people to sparsely populated and remote areas of the country. As frackers move in, demands are placed on limited housing stock and rents climb, according to research from Cornell University.
Williston - not so long ago a place where a traffic jam was two people at a stop sign - saw its population more than double, to an estimated 33,547 last year from 14,716 in 2010, according to estimates from North Dakota State University. The number of homeless in the area is 986, according to official town estimates.
Rents have skyrocketed. One-bedroom apartments, which cost $500 per month a few years ago, command as much as $2,000 per month. It's difficult to get a real estate agent on the phone, and waiting lists for apartment houses and RV spaces overflowing. People are renting out rooms in their homes for as much as $1,000. Starter houses cost $300,000 or more to buy.
There are no homeless shelters in Williston, and the city says it does not have the resources to cope with its new homeless population.
"People are coming because it's widely publicized that we have jobs, but it's not widely publicized that we don't have housing,"
...
"The common scenario is that these people spent their last dollar to take a bus to come here to make a better life for their family back home," said Captain Joshua Stansberry of the Williston Salvation Army. "But with the high cost of living, they are forced to live a transient lifestyle."
...
"The jobs are here," he said. "But you can be damn sure of one thing: None of us can find housing."
It's not just workers who are affected. Student homelessness in North Dakota increased 212 percent last year, according to the U.S. Department of Education.
...
"As early as three to four years ago, the homeless were a number that we didn't even calculate, nor did we monitor it," said Steve Holen, superintendent of the McKenzie County School District, which includes Watford City. "We didn't feel the need to as we had virtually no situations in which this was occurring."
The Salvation Army in Williston is now buying one-way bus tickets for people to go back home.
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"If they can live here now, they're going to LOVE the summer weather."
Good night North Dakota!
Make that money...
http://1-media-cdn.foolz.us/ffuuka/board/q/image/1358/47/1358479178807.jpg
"DRAINAGE ! DRAIN-AGE !"
http://1.bp.blogspot.com/_XLXGncLY1gw/TOrJj9yW5_I/AAAAAAAABp4/QqSEOEVaMm...
Can't win for losing. Homeless in North Dakota. That's pretty bleak.
I live in ND (albeit the eastern part of the state, though my grandparents live out west, and my aunt runs a real estate company in Williston) and things are alright. Yes, they have a homeless problem in Williston, but that's because it's a boomtown where housing prices have skyrocketed. My grandfather sold his home and could've made triple what he could've just 5-10 years ago if he hadn't sold it to a relative. You get 15 bucks an hour working at McDonalds (though a hamburger costs more than twice as much than here). Traffic is awful. A lot of them live in temporary trailers and such, but you can make a lot of good money out there if you're able-bodied. And yes, the weather is as bad as people say.
There are all sorts of grand plans. The reservations are planning two refineries, the first in decades, since they are exempt from a number of regulations. They're working on a way to gather the natgas from the wells (which is difficult because they aren't there for long). It'll crash if/when the steep fracking drop-off comes. I've heard from some reliable sources that it may come in 1-3 years, though they're planning on 10-20. That seems very, very unlikely to me based on what some knowledgeable people have told me, but nothing I can do about it. At least they lowered our property taxes by a good chunk.
The homeless situation is, I think, simply a product of large influx and valid bubble concerns. When building costs are triple what they used to be, and it may not be booming in 5 years, it doesn't make sense to go nuts on the housing construction. Yes, it sucks to live in the shoddy temp housing, but it happens in any boomtown. I wouldn't worry now. I'd worry if they don't manage the bust well, when it comes.
I have relatives over 100 miles away from Williston with the same housing prices, same housing shortage and safe traffic/crime issues. Any way this ends, it's gonna end badly. Thank God I don't live any where near that place.
I used to live in Williston, I remember a classified ad trying to rent a 5th wheel trailer for 1200 bucks a month. They probably got it, too.
I was working a short term contract on the east end of ND in the spring of 2013. i moved 1300 miles to the south and thought i'd never see snow until i get back to Idaho. Not!! Ice and snow today in Alabama!!!
When i was in ND, good housing was scarce or at a high premium. And the local residents were very wary of anybody trying to setup man-camps. They envisioned the dregs of America invading and bringing their disrespecting, drug-adled attitudes to their towns.
Yeah sure they are... when it's a 100+F with wind and dust :)
Oakies 2.0, migrating to jobs with nowhere to live.
this isn't California.
Temperatures can (and have this year) reached forty below on the mercury...which doesn't include wind chill.
And i've been in blizzards out that way too.
these are no mere "white outs." the snow will literally "plug up the over pass" (14 feet high.)
the Day After (usually a nice, sunny and calm 20 below) usually involves counting the number of vehicles both large, huge and small...off the highway. That number can be quite large.
I've counted well in excess of a hundred.
That would be from a single storm.
And yes...i've seen worse in Atlanta too.
I once applied for a job in N. Dakota. They half jokingly told me their homeless problem was solved once a year. The steam grate that might work in NY or DC doesn't cut it in Minot.
There is a new regime here? Well good night, dear ZeroHedge. Good night ladies. Off to buy some gold (If I had some money, that was.)
Blackwater Tent cities!
Pottersville!
Doesn't sound like members of the FSA to me....
No, that's the sad part. If they had an RV or travel trailer they might be able to make it work. Unlike the 30s homeless camps aren't tolerated any more, so you need something that is either passable as housing or mobile enough that you're not in any one place sufficiently long for the man to hassle you.
This ties in with what I think the vision for America will be 10 years down the road -- tons of elderly poor, likely forced into homelessness since unlike the past, they don't own debt-free homes. The logical thing for them to do is move into dilapadated RVs or mobile homes and live in cheap trailer parks, likely next to suburban McMansions that are empty REOs or rentals filled with 3 generations.
Sounds whacked, but trailer parks could be an investment opportunity if you want to get way ahead of the curve.
"Sounds whacked, but trailer parks could be an investment opportunity if you want to get way ahead of the curve."
That may be one of the most depressing things I've ever read.
Anyway, I believe they do have tent cities in ND now. Not sure if there aren't enough or what.
Why build a trailer park when FEMA is gonna supply trailers for us old folks :)
Long Flophouses
Bullish!!!!! Foreward!!!!!
Yup: http://www.zerohedge.com/news/2013-10-18/carlyle-group%E2%80%99s-latest-investment-trailer-parks
And from WB7: http://www.flickr.com/photos/16315439@N05/10506903945/in/photolist-h1sCui
Can't find the pic of the ZeroHedge Trailer Park but that one too.
tent citys just like the sattlers! oh by the way fuck you Obama!
Convert school buses into living spaces.
http://www.skewly.com/
Opportunity.
I heard you can buy a barely used school bus in New Orleans.
<disclaimer> Slight water damage.
Free Mayor Nagger!! (and Jon Corzine too).
Too many jobs and not enough houses!?!
It's time for BAC to step up and show the Bank Of North Dakota how to run things right.
On the other hand, if the price of oil were to plunge to about $50 - $35 per barrel again, such as in 2009, that should clear that problem up quickly.
I do believe that the break even point is around $75 per barrel for fracking, and can you imagine the chaos there would be in other countries that tie their social policy to higher oil prices to keep some semblance of stability if oil dropped below $75 for an extended period of time?
Don't know why you're downvoted. All you have wrong is the breakeven price. It's higher, but I won't venture a number. No one knows. It's different for every well because there are no pipes. They bring the oil out from the fracked well, and they truck it to a railhead. The distance varies, the hills vary and thus the fuel consumption of the truck varies.
Why no pipes? Each well dies too fast. It will do 400 barrels/day in month 1 and be down to 175 by the end of the first year. The pipeline can't complete and earn out on flow with that kind of death rate. So the trucks they do roll, except when it snows, and then you get oil output plummet. We'll see that in a few days with the December report.
BTW the mechanism for broad oil price decline is economic drain circling. Demand destruction that happens faster than supply erosion.
Doesnt FEMA have a bunch of trailers in Louisiana not being used? Where is help from yhe arrogant, narcissistic, lying illegal alien muslim sociopath when its needed? Playong golf?
A bunch of carcinogenic trailers, yes.
Sounds like it's right up their alley (TPTB) and would really compliment the poisons they put in our food and medicine.
This is non problem that doesn't merit a blog entry. Any enterprising individual(s) could throw up housing at an unbeleivable speed. You can build out 1000 housing units in six months without even trying. It is not the lack of housing it's the lack of initiative.
http://www.kitwest.com/
I think the problem, as stated above, is that these people show up broke. You can't "try hard" your way out of that. It is really bad planning though.
ND don't think the run will last and will not put in the infrastructure if it's "temporary".
NOT! its a NIMBY situation up there Zero. You can't just setup a large man-camp anywhere! You have to get permission, permits, blah , blah, etc. Many of these wells are on private property, and the land owners/farms will tolerate the oil work but not their sleeping quarters.
One does have to wonder when the rapid decline rates of "unconventional" oil and gas will no longer be outpaced by rapid drilling. It's no different that boom/bust cycles in commodities in general, perhaps other than just happening on a faster time scale. Time will tell...
And thanks to FED legerdemain, housing there and anywhere else is overpriced.
Boom/Bust in everything we do; adults not in charge.
Bullshit. These are jobs that are actually productive, and this is I believe a reflection of the malinvestment into short squeezed zero fundamental stocks and a BS stock market in general as opposed to the capital flowing where actual value is being created, which is in places like Williston.
Thanks to ZIRP and QE homes are being built in areas of insolvency and indebtedness instead of in places where real value is being added. Reality check is coming for many Americans.
I agree with this. Not only that but this has been true throughout history...including Williston itself.
http://en.wikipedia.org/wiki/Hell_on_Wheels
http://en.wikipedia.org/wiki/Wild_Bill_Hickok
"aces and eights" was the hand in case anyone plays poker.
America turning into China in a sense.
In China, most of the workers are migrants.....unlike the West (or what was the "prosperous West"....right now it's the "Shitty West") where most workers live relatively close to their famlies/homes/job.
Workers will travel up to 4-6 hours, mostly from the boons of China's mainland, to head to the port areas like Shenzhen and Qingdao and Shanghai, where the factories that make our cheap shit are located. They stay in dorms 4-6 a room, with often just bunk beds, a shower/sink, and a hole in the ground to shit in. They work 8-10 months on and off (depending on times of demand) to make their money, which they then take back home to provide for their families or to pay for their schooling (and if they are lucky, buy gold with it).
The only vacation time they get is Chinese New Year (right now, usually 2-4 weeks) and May Day. No continuity. No independence. Just do as your told, get what you can, and shut the fuck up.
Now, I hear of my fellow millenials in the midwest and northern western states living in cars and winnebagos during the "fracking seasons" when they can make their overtime details on the rigs (with risks of getting hurt on the job, or cancer later in life....nevermind when the fracking starts the earthquakes). They use this money to pay for schooling (better job?), to pay for their children's needs (more religious folk tend ot have families earlier), and maybe pay down on a house or car (if they aren't still in ad hoc to the colleges).
They live in their cars (b/c they can't find/afford housing) during the winter, then go home/class for the summer (while also probably working a service job, like gas attendant or waitor/barkeep).
No continuity. No independence. No chance to explore other avenues.......unless they are willing to take HUGE risks.
At least those risks aren't like in China, where you risk silence (or even death) by the state.
But we're kinda getting there, no?
ZH posters can't have it both ways. The US can't both be "filled with lazy ass Free Shit Army assholes who won't work, so fuck em," and "workers who work so hard they dont have a chance for self fulfillment." Another example of the permabear "everything is always shit at all times" mindset.
I live in NW Montana. I know a number of guys who commute(two weeks on/1week off) from here work in the ND oil patch. Getting housing is not easy. And the days are gone when you can park an RV anywhere you want. Building housing isn't a snap either from what I'm told. One local builder here told me his company considered building houses over there but it's a pain logistically. Hard to get material in there. The BNSF is the only RR and the Highline(US2) is the only major road.
I would not invest in housing there. What happens in 5years, 10 years when the oil and gas dry up?
As an aside, I was talking to a neighbor who is a BNSF train engineer. He confirms there are lots of high paying jobs there today. But...As here and I suspect all over the country, many of these guys don't want to work, especially if it's hard work like in the oil patch.
The engineer's brother-in-law sells cars in eastern Montana. These young guys making a $100K/year come in to buy a car and can't come up with $2000 for a down paynent. Nobody "saves" anymore. They just spend.
RE
I also bet this is due to debt (which is why everyone is seeking the elusive "$20/hr" and higher jobs).
That's where the inflation is: it's not on consumer goods persay, it's paying down the interest on your debt.
It's also why millenials where I live in the Northeast don't mind taking a higher paying contract gig minus the benefits (and the security). They need that hourly earn to pay down the vig!
Gee, twice the minimum wage. I am SO TEMPTED now!! /s
This ain't even the half of it. When I went over there in 2011 it was Anarchy... It reminded me of that Clint Eastwood movie fist full of dollars.
Get me 3 Coffins Ready They got missing people; then the body turns up. So you got a few killers in the area... Look here It's better now; because they hired enough police; but in 2011 that place was the wild west. You had strippers flying in from Las Vegas; You had Pimps; and Drug dealers out in the open. People were walking around like the wild west with holsters and weapons.
It's still wild over there. I work in the gaming industry. A customer of ours recently returned from a 2 year gig as a bartender. She said she couldn't do it anymore because it is so wild and crazy over there. She made a ton of money though and actually saved most of it.
I agree; I talk to some of my old buddies and they say things are better. I made my way down to TX and have been here for the last couple years in the patch. 20K less; but the trade off's I like so Ill ride it out here for a while longer. PS I will never forget that converted greyhound bus into a Stripper show on wheels rolling around the area.
Send all of those FEMA trailers up there. Problem solved.
The marketplace supply of housing and infrastructure takes awhile to catch up. This is a rapidly developing situation. I admire people packing up and heading for jobs but they didn't do any advance recon on jobs? on housing??
If you took 2 minutes to search, you'd know housing is rare and expensive.
I'm sure there will be a lot of housing coming online this spring/summer.
If you look around there are some super insulated easy to assemble housing units mainly used in developing countries but the big problem is more zoning approval and infrastructure water/sewer etc....
speaking of...i think i'll start a porta potty biz there. one mans shit is another mans gold.
Many places are reluctant to change zoning and spend on sewage, electricity, and other infrastructure--for good reason imo.
How long will the boom last?
Hmmm. Shortage of housing, rents rise, builders and owners build new houses and rental units. Construction jobs are created as well as more business for suppliers and subcontractors. Infrastructure expands. Sounds terrible.
Sorry folks but this is a bit of a misleading article. I live in eastern Montana and work in the oilfield. I spent all of last year near Williston. So, here is what I see everyday: Pleny of jobs. In Sidney, Montana McDonalds is paying $15 an hour and no takers. There are plenty of hours to be had for workers. I work roustabout, which is periferal work on the pumping sites. We get 50-80 hrs. a week, wages run $18-$23 per hr. Plenty of jobs to be had. Do the math, even for no-skilled workers, that's pushing 60K.
As to housing, if you need a three bedroom house, then yes, you're fucked. Rents will be in the $2-$3000 range. A friend pays $2000 for a nice two bedroom in Sidney. However, if you are willing to do the RV park thing, then costs go way down, and there are plenty of spots. Really no shortge whatsoever. Our RV park is half empty right now. Prices are in the $500-$900 range including power and web access.
Heitcamp is the state Socialist, so anything she says take with a grain of salt. She has an agenda. To sum up, it's hard here in winter, and tough if one gets here broke, or if you need a big house. For the working class of young, unattached people, times are good. Most of us work like dogs, bank all we can, and can't wait to get the Hell out when we've saved enough to reach our financial goals.
Good luck to you out there. My heart goes out to you and all of the guys out in the blowing cold with your hands touching steel sucking the heat out of you. How long does it take to get warm once you get back home?
Homelessness up 200%
Do I understand this correctly that RE values are up at least 200% as well?
What's that correlation again?
So this is life as a permabear. An industry generates badly needed jobs. But, all you can see is the downside rather than the opportunity. And, few of you are ready to accept that the Bakken is a real thing. You'd rather be permabearish on every single thing.
Good post, although don't generalize the bulk of the ZH commenters as what you are insinuating, I would say. Read my post above on this thread, and the one about how these are good problems to have, and the issue elementarily is that homes are not being built in the productive areas but rather just being bid up with ZIRP and QE and short squeezed stocks in places where the capital is not really used as investment (and investment and production are the things that need to pick up after this huge consumption binge in general).
Peak oil IMHO is just BS. Value is subjective, so while something like EROEI is something to consider, technology keeps improving, and only retards like the current TOTUS are the hindrances.
I guess no one realizes when the settlers moved west that they were homeless by definition when they showed up on a bare patch of land to homestead.
I wonder, the jobs boom attracts your average American seeking work, does the oil and gas boom also attract Mexican Immigrants, and if so, is there any negative pressure on wages. To my knowledge there are no unions in the oil patch, thus anyone seeking work should be able to tell the boss, "well I see you paying 60K a year to a girl driving a water truck, I'de be willing to drive the same shift for 45K. Anyone know if workers can actually negotiate for jobs using the offer of similar work for a lower scale of wage? I know if I were burger flipping for shit wages, and I could drive a water truck for 50K a year, I'de do it. I just ask because I saw a girl on TV who drives a water truck out there and she says she makes 60K straight time, and 80K with overtime. A mexican would drive for less, I am sure of it, and so would many others. How are wages negotiated out there???
I don't think Mexican's want or need to work anymore.
This sounds racist, but it seems that they cannot handles the cold weather..... I have met some that are tough and can handle it , but for the most part they do not like 20 below.....(Who does)????
Seems the approaching ice age, after the comets et al, will take care of this problem and so many others, so why worry about anything else?
I do not understand the big deal... I spent lots of time in little travel trailers and pup tents. You go where the money is...... Do you expect the tasmah hall when your going to a place where your making big buks????
Poor babies. I have camped out many times and it is no big deal.
Toughen up buttercups.......................
Don't worry, once the water wells get polluted with all the fracking chemicals the shortage of housing will be solved.
There's gold in them thar hills! But, there ain't no cheap fuckin' place to rest me weary head. Arrrrrrrr, the scourge of the world be inflation.
If you go on Zillow or Truilo and hunt for a home its ridiculous. Raw land for an acre is going at $70k minimum. Add the building of a house and you're up to $300k including permits for a 1 bedroom small ranch home that may need to be off grid w/solar.
Should've bought 4 years ago when it was nothing but farm land.
Lord, Lord....I'm surprised at what i'm reading here! Especially among such an intelligent audience. This site has more real knowledge than anywhere else I go. But some real whoppers here in this thread: first thing, "Messicans" do just fine in the cold. Like it? Fuck no, but then neither does the poor Gringo bastard working in it. One of my crew members is Mexican (with papers).
No need to bargain wages down. This is a boom cycle, so you bargin wages UP! You won't give me $18? Fuck you, the other guy down the street offered me $20, sort of thing. Supply (labor, especially skilled) is increasing, so we may hit that point, but not yet. If we see a big hit to the economy, or oil drops, it'll be bad here for wages and work, but it's still good now. A skilled guy (most especially a truck driver), can pick from any of a half-dozen offers.
when I got here, I asked a Big Cheese how long this "boom" was going to last. TWENTY YEARS was his reply. There is still another layer below us, and wells will be refrakked. Plus many of the sites get one well now, to hold the lease, the other three or so will come later.
Pipelines are going in like mad. Even now in the winter, with 3-4 feet of frost. Trucking oil and salt water (a LOT of salt water comes up with the oil. It gets separated out and stored/trucked away, then pumped down a dry well. It's called Production Water.
Trucking costs about $1300-$1500 a load for oil/water (250 bbl), so they want it piped. Massive infrastructure pipelines are going in as fast as is humanly possible. Demand for truckers will fall in a few years.
And last, YES there are both Free Shit Armies and people who work like dogs and don't even know what "self fulfillment" means . AW, what the fuck were you thinking?
When I was in Williston a few years ago folks with a CDL could get a job making 100K per year and the DMV was about a month out for scheduling CDL testing.
Not enough housing? Then BUILD some, dumbass!