Home to the now-famous Bakken Shale Oil Formation, North Dakota is enjoying a huge energy boom since the introduction of advanced extraction techniques like horizontal oil drilling and hydraulic fracking make drilling the site much more profitable than it was even 10 years ago.
The city of Williston is home to the Williston Basin, an area of 150,000 square miles that holds one of the world's biggest oil fields. Since 2008, this city has seen its economy soar and its population swell to the point that homes are experiencing a rapid acceleration in value, and rents are the highest in the country, according to a survey earlier this year.
Unemployment is low, pay is high
North Dakota has the lowest unemployment rate of all the states: 2.7% as of June, compared to the national rate of 6.1%. Thanks to the energy industry, the unemployment rate for Williams County, of which Williston is the county seat, is a teensy 1%. Jobs in the oil industry pay well, usually $100,000 a year – or more. Even Walmart has ponied up, paying workers an unheard-of $20 per hour.
This meteoric growth has turned the city of Williston into something reminiscent of a western boomtown. According to the U.S. Census Bureau, Williston saw its population grow from 14,787 in 2010 to 20,850 in 2013. Recently, an impact study by the city estimated the number to be 29,595.
This explosive population growth has taken its toll on the area. The existing housing stock was unable to support such an influx of residents, and housing prices soared. The Department of Housing and Urban Development noted last summer that the Minot-Williston Housing Market Area saw home prices jump 24% from April 2012 to April 2013, due to population growth and a low inventory of houses for sale.
A housing crisis looms
With rents topping $3,000 per month for a two-bedroom apartment, many new oil field workers have set up housekeeping in so-called "man camps" – rows of trailers meant as temporary housing. But the pace of new rental housing has only increased by 1,100 units since 2010, according to HUD, while the number of new residents in need of housing was nearly double that number.
There is little doubt that Williston needs to get moving on this problem. The city expects its population to reach nearly 40,000 by 2017, and has begun undertaking a planning review to identify areas where new housing could be built. So far, the Planning Department has reviewed locations where 2850 multi-families and 477 single family houses could be constructed.
Although permitting has increased since 2012, only 850 apartments were under construction in the Minot-Williston market area as of April 2013. One development, called the Confluence at Harvest Hills, is expected to charge rents ranging from $2,700 for one-bedroom apartments to $4,500 for three bedroom units. Clearly, as long as Williston's oil boom continues, so will its attendant housing-price premium.
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