Housing Development Keyed to Oil Well Projections - KXNet - Bismarck/Minot/Williston/Dickinson

  So what do you get when you cross robust energy development with housing shortfalls?  Temporary living arrangements for years to come.

Planning for housing in the oil regions makes for a complicated blueprint.  Oil company projections are key.  Researchers are able to calculate, per well, how many more people -- temporary and permanent -- will need housing.

"Well, the impact is so large that it's going to take a while for us, the new building, the new construction, to actually catch up.  And how long that's going to be?  It's probably good ten to 15 years out," says Dr. Richard Rathge, Professor, NDSU.  "So you're going to continue to have people living in very temporary quarters -- whether it's a truck or a trailer or a tent -- until the housing stock and the creation of new housing stock can catch up with the pace of demand."

Part of the challenge is getting developers on-board.  North Dakota previously experienced a boom-bust energy cycle in the 1980s.  While today's situation is fundamentally different due to technology that can capture oil in very different ways, memories remain.

"When the first boom happened, it was very short-term -- five years -- but there was an expectation that it would be much longer," says Dr. Rathge.  "So lots of folks were left holding the bag, if you will, and there are long memories, because some of those are just now paying those off.  They're very shy, if you will, on the development side."

At some point, it is assumed developers will gain confidence and start chipping away at the shortage with new building.  When that happens, how do impacted areas avoid what many fear -- over-building?  Mike Anderson of North Dakota's Housing Finance Agency responds, "certainly, there is a concern about over-building and we're monitoring that, not only us, but the Governor's office.  We're keeping track of what's going on in the oil industry.  The Housing Needs Assessment, the projections that that's suggesting, is that we're not close to hitting that tipping point, as long as the oil continues to go as it is and as long as the general economy of the state continues to be what it is."

Based on oil company well projections, North Dakota's economy is expected to remain strong.  Currently, Western North Dakota has 7,200 wells -- with plans to be at 32,000 by 2025.  

These are among the issues being discussed at this year's North Dakota Housing Finance Agency's 22nd Annual Statewide Housing Conference  The conference runs through tomorrow in Bismarck.