Williston housing shortage could have regional repercussions

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Williston Realtors sold more homes in the first quarter of the year than in any other previously — even outselling 2012 and 2014 boom levels.

Homes that changed hands in the quarter numbered 110 — about 30 a month — said Williston's Development Services Director Mark Schneider.

The North Dakota city is in the midst of a single-family housing shortage that promises only to get worse as oil and gas activity picks up for the season. And while Williston area homebuilders are encouraged by city response to local affordable housing needs, officials are still unsure how incoming workers might be housed through the summer.

Apartments and hotels are at 90% to 95% occupancy already, Schneider said. Williston Area Builders Association President Mike Dolbec, of Windsong Custom Homes, expects those units will be full within a couple months.

Twenty-five single-family homes are listed for sale in the $250,000 to $330,000 range and 24 in the $330,000 to $400,000 range, according to the Multiple Listing Service.

It takes three to four months to build a new home but the current inventory could be gone in two, Schneider said.

About 18 people — builders, landowners, bankers, Realtors, an appraiser, city officials and a state senator — met for two hours last month to formulate a plan of attack.

"I'm very, very pleased," Dolbec said of city and county officials offering help to builders. "There's a lot of positives to getting all the parties involved."

Some steps are being taken to reduce cost on building materials. For example, a less expensive type of rebar could be allowed by the city and a new type of concrete form that could allow basements without Sheetrock is being considered.

Dolbec said new ordinances since 2015 have added to the cost of homebuilding, so if the city is willing to relax some of the new requirements, such as not requiring landscaping by the builders, there could be some cost savings realized.

He said this is particularly important with high lot prices — about $65,000 on average in the city and about $70,000 for larger county lots — and higher costs for materials, such as the 40 percent increase for lumber over the past year.

The city's next housing meeting will be in a couple weeks, Schneider said, but predictions are still daunting.

North Dakota Job Service's Williston office has 2,000 job openings advertised. Each week of this school year, the Williston School District saw, on average, 19 new students. And a 2016 North Dakota State University study predicts 60 percent population growth in Williams County by 2029.

That's about 1,600 new people per year, meaning more than 500 homes needed annually if the prediction holds, according to Schneider. The city has 732 buildable lots, complete with sewer and water available, but that won't hold them through even next building season.

And for those homes on the market now: "We have inventory ... but what we have are homes that need a lot of work," said Realtor Kassie Gorder of Basin Brokers.

Of the homes in the $250,000 to $330,000 range, a price range Gorder said is most attainable for the majority of the young families who are looking, 15 are more than 50 years old and four have been on the market more than 50 days. Only eight are less than 50 years old. In the $330,000 to $400,000 range, six are older than 50 years, one has been on the market more than 100 days, six are still being constructed and 11 are less than 50 years old.

There are some apartment buildings in town sitting vacant because the owners don't have anyone to manage them, according to Gorder. With those in use, apartment occupancy could be lowered to a rate of about 80 percent. She said the owners had listed them for sale a while back but no buyers could be found. Now that they're vacant, finding a buyer could be even harder.

There will be more homes on the market by fall, said Dolbec , indicating his company will build 40 to 50, but only 10% of those are without a buyer.

"One of the things that's a real challenge for builders is to secure subcontractors," Dolbec said. "I'm all for more builders coming into the region. More builders means more subs and subs can work for a number of builders."

There are an additional 756 lots zoned in the area that still need roads. Schneider said three to four developers have been inviting builders from other North Dakota cities, trying to lure them to do the work.

Tory Otto, of Patriot Homes in Bismarck, met with one such developer. But with the higher costs of building in Williston, he says expectations may be unrealistic.

Otto said the developer was predicting building costs of $110 to $120 per square foot. But even in Bismarck, homes are being built for $180 to $190 per square foot. That doesn't include the $30,000 to $40,000 more he'd have to add to the total cost for travel if he brought subcontractors to Williston.

Otto has been building some homes in Killdeer. He has good relationships with his subcontractors, and they're willing to go for a handful of projects.

"The housing market has not come back strong enough in Bismarck," said Otto, pointing out that builders could find subcontractors willing to travel but it will add to the cost.

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