On March 30, the town of Williston, N.D., officially debuted “Build Baby Build,” a marketing program that encourages builders, developers, and investors to make a long-term commitment to this municipality, which the Census Bureau has just identified as being part of the fastest-growing micro area in the country.
Williston has gone from approving the construction of between five and 10 housing units per year in 2008, to issuing residential permits in 2011 for 2,131 single-family homes, rental apartments, manufactured homes, and hotel units. Town officials previewed their marketing campaign at a recent conference in Bloomington, Minn., attended by 500 Realtors, which focused on growth opportunities in North Dakota. “As we add home building capacity, we see our community transitioning from temporary housing to permanent housing and investments,” stated Shawn Wenko, deputy director of Williston Economic Development.
For the past several years, Williston has boomed along with other towns in North Dakota, Montana, and western Canada that sit atop the massive Bakken oil field, which produced more than 128 million barrels last year and whose reserves are estimated to be at around 3.7 billion barrels. Bakken’s oil is more accessible thanks to hydraulic fracking, the controversial drilling practice that applies extreme water pressure to extract oil from deeply embedded shale.
As of early April there were 209 rigs permitted in North Dakota, 90% of them within 70 miles of Williston, according to Ann Kvandi, assistant to the city’s executive director Tom Rolfstad. Needless to say, Williston—whose population has ballooned to 24,374, from 12,500 in 2008—has nowhere near the permanent housing or residential infrastructure to accommodate so many people flooding in to work in the oil fields. Some rents have zoomed to $2,500 per month “and there’s zero vacancies,” says Kvandi. RV parking spaces go for between $700 and $1,000 per month. “People are renting basements in their houses for $400-$500 per month,” says Ray Blesener, a Duluth, Minn.-based architect who with a general contractor has been building in North Dakota for four years.
Remote housing for oil workers
“We need more housing,” asserted North Dakota Senator John Hoeven, who last Monday toured a “man camp” in Dickinson, N.D., with U.S. Secretary of the Interior Ken Salazar.
Such camps have historically sprung up whenever oil drilling has spiked in Texas, Louisiana, Colorado, and other oil-rich states. In the past, migrating workers would sleep in their cars and pitch tents for temporary shelter. Some still do, but workers flocking to North Dakota now are more likely to be living in their own RVs or staying in large dormitory communities whose room and board costs are often subsidized by oil companies that commission this housing.
A recent article in TheNew York Times about man camps described Spartan living quarters: 7- by 11-foot cubicles separated by thin walls, with twin beds, a cabinet, TV, DVD player, chair, and single window. Companies that build and manage this remote workforce housing, on the other hand, paint a very different picture of living environments that include such amenities as kitchen and dining facilities, Internet access, exercise and conference rooms, and even laundry services.
Regardless of which portrayal is more accurate, turnkey workforce camps are becoming more prevalent in towns with oil-dependent economies. Prior to a moratorium on new man-camps it imposed last September 12, Williston had issued permits for more than 9,200 temporary housing units, and most of them are likely to get built. This kind of temporary workforce housing is expanding as well along the 400-mile stretch in southern Texas where the Eagle Ford Shale yielded 30.4 million barrels last year and is estimated to contain reserves of at least 3 billion barrels.
On March 22, Boston-based Target Logistics, the largest turnkey provider of remote workforce housing in the U.S., held a grand opening for its first “lodge” in Texas, a 300-room complex in Corrizo Springs. Since 2010, Target has opened eight lodges with more than 3,700 beds in Texas and North Dakota, including the facility that Salazar and his entourage visited. The company has several more lodges scheduled to open in these states this year, and is keeping its eyes open for opportunities near Pennsylvania’s Marcellus Shale.
Stan Katz, Target’s vice president of construction, points out that Target controls all aspects of these facilities: it purchases the land, builds and owns the camps, and turns over their management to its operations division. Supplying modules for Target’s camps in North Dakota is Guerdon Enterprises, the Boise, Idaho-based modular-home manufacturer. Guerdon’s business development manager, Troy Schrenk, sees Target and other remote housing providers as being in the “hospitality services” business, offering living experiences that “are more like hotels than camps,” complete with front-entrance lobbies.
That might be an exaggeration, but living in these camps is hardly roughing it, either. Both Schrenk and Katz single out the heated “arctic corridors” at Target’s camps in the north, which allow workers access to living quarters, dining, and all other rooms without having to go outside. And the advantages of these camps for oil companies that support them, Schrenk suggests, are more productive and better-rested workers who don’t have to worry about preparing their own food and have recreational activities to fill their free time.
Schrenk places remote workforce housing within a larger “continuum” that encompasses semi-permanent and permanent housing, all of which his company makes product for. He expects demand for permanent housing in North Dakota towns such as Williston to increase over the next 24 to 36 months. Guerdon, with 320 production employees, is currently supplying modules for a three-story, 206-unit hotel and a four-story, 400-unit apartment building in that state. It also has several large multifamily, multi-use projects at different stages of development that will include townhouses, condos, single-family homes, and garden apartments.
Another modular-home producer that is dipping deeper into remote workforce housing is North Carolina-based Champion Enterprises, which operates five of its factories in the northwestern “energy belt“; has supplied modules for remote housing camps in Canada; and has contracts for other camps in North Dakota, says Kevin Flaherty, Champion’s vice president of marketing.
He’s hoping, too, that oil drilling will eventually elevate demand for permanent housing, as Champion is contracted to supply a 160-unit apartment complex that’s scheduled to break ground in Minot, N.D., this fall, and another apartment building that will break ground in Williston this spring.
However, Flaherty was in Colorado in the 1980s when demand for shale oil tanked and local markets went bust. So he’s cautious about predicting long-term housing trends in these areas. Katz of Target Logistics adds that towns that have been through oil booms and busts are sometimes reluctant to approve new permanent housing. In Texas, for example, man camps are being built on land where “dilapidated buildings” from the last oil boom were torn down, he says.