The Growing Homeless Problem in North Dakota

Lured by the promise of jobs created by the oil and gas boom, Mario Solano left his home in Miami to travel to a new life in the center of it all – North Dakota.

At first, Solano found temporary jobs driving trucks for oil and gas companies. Eventually, he found permanent employment working as a ranch hand in the town of Williston, making $14.50 an hour, or about $30,000 a year – plenty, Solano thought, to get a small place of his own.

But rents are surging in Williston – and finding a place to live is difficult at any price. So Solano wound up living in his car.

“The weather’s arctic,” he said. “And it’s rough all the way around.”

Hundreds of people like Solano are finding themselves in similar circumstances in North Dakota, the state with America’s fastest-growing economy. North Dakota has attracted thousands from across the United States and abroad since the late 2000s, as oil companies set up hydraulic fracturing, or fracking, operations that extract tens of billions of dollars’ worth of oil and gas from the Bakken shale.

Tales of $300 signing bonuses for fast-food workers and gas station attendants who make $50,000 per year are legendary, attracting people to the state at a time when the official unemployment rate in the rest of the country is still hovering at 6.6 percent. North Dakota’s unemployment rate is 2.7 percent.

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.

“People are coming because it’s widely publicized that we have jobs, but it’s not widely publicized that we don’t have housing,” said Michael Carbone, executive director of the North Dakota Coalition for Homeless People.

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.

Energy companies – where workers can earn $100,000 or more in the oil and gas fields – often build or rent housing for their employees. But service industry jobs do not come with the same perks.

NO SHELTERS

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.

Williston’s mayor, Ward Koeser, recently asked the city council to use the local National Guard Armory as a shelter. But councilors decided the city could not afford to pay the $450 a night for security.

The city, which has a 2014 budget of $233 million, has also been struggling to come up with the $625 million it needs to repair roadways and build new water plants. It recently had to borrow $105 million to build sewage treatment facilities, fix roads and install new water and sewer lines.

“We have enough to barely keep things going, but we cannot afford the infrastructure we need,” said Katie Long, communications director for the Williston Economic Development Council. “North Dakota may be a rich state, but Williston is not a rich city.”

While tax revenue from oil and gas operations can certainly bolster a town’s coffers – and residents with energy company leases can earn hundreds and thousands of dollars a month – it takes time to build housing and other infrastructure, and sometimes the money does not reach where it is needed.

North Dakota expects to generate more than $5.28 billion in oil and gas tax revenue during the 2013-2015 biennium. Williston’s share is about $32 million a year. Overall, North Dakota’s take from all taxes – including local property taxes – is $11.1 billion.

Williston says it has asked the state for aid, and state officials say they are working with Williston to develop appropriate programs.

On the federal level, North Dakota Democratic Senator Heidi Heitkamp recently introduced a bipartisan housing finance reform bill that would fund programs for the homeless in her state. The bill is in committee.

“Homelessness is a quickly growing problem in North Dakota, which hasn’t received the attention it deserves,” said Heitkamp in a statement.

UNDER BRIDGES, INSIDE BINS

In Williston, people who cannot afford or find housing sleep underneath bridges, inside grain bins and in the stairwells of the Best Western hotel on Fourth Avenue. In nearby Watford City recently, a homeless man living in a dumpster burned his hat, scarf, blankets and boot liners to stay warm. He eventually had to have his two frostbitten feet, which had turned black, amputated.

Every night, Solano pulls into the parking lot of Love’s Gas station on the edge of town. He sticks towels into the cracks of the van’s windows and piles blankets on top of the air mattress in the back. Temperatures can drop to -30F here in the winter, so he turns the car on every hour to heat it up. He uses what he calls a “piss bucket” to go to the bathroom at night.

After he wakes, he showers at the gas station, has his breakfast at Hardee’s or Walmart, and shows up at the Salvation Army to get vouchers for prescription drugs and canned food.

“You have to be kind of savvy on a lot of things – or you’ll perish here,” said Solano.

Similar tales around town abound, like the customer service representative who lived in his car in the company parking lot and the family of five that lived in a van.

“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.”

Joshua Repko, 25, recently hitchhiked to Williston from Texas. He makes $12.50 an hour working for an electrician. But he spends $60 a night on a hotel.

“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.

In Watford City, for example, 25 percent of the children, or 263, are homeless. Teachers have had to deal with students who have no kitchen table – or desk – to do their homework on at night. Class sizes have swollen from an average 16 kids per teacher a few years ago to as many as 28 today.

“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. Recently, a private citizen donated an unused portion of a “man camp” – the mobile-home parks that companies use to house their workers – for use as a homeless shelter.

The shelter would give beds to up to 20 people a night and provide laundry, hot showers and breakfast. It is expected to be up and running within a few weeks.

Reuters

• Become A Funded Futures Trader