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Poverty in North Dakota oil patch

Discussion in 'Sports and News' started by Stitch, Aug 14, 2011.

  1. Stitch

    Stitch Active Member

    The oil boom in western North Dakota means plenty of jobs available, but rentals aren't affordable and food pantries are seeing increased demand. I know one member of the board worked in the oil fields for a while, but retuned to journalism, so it can't be be great work.

    I guess this is a case of the availability of jobs hurting a region as much as it's helping.

    http://www.thedickinsonpress.com/event/article/id/50404/
     
  2. crimsonace

    crimsonace Active Member

    Re: Where is the trickle down?

    Looks like a supply-demand issue. Oil boom = lots of demand for new workers. Problem is, the housing stock in any rural area (especially someplace as rural as NoDak) isn't going to be able to absorb a lot of new residevents, so the price naturally goes up until new homes/apartments can be built to accommodate the new workers.

    Eventually, new homes/apartments will be built and everything will come back into equilibrium and the cost of living will come down, but that takes time.

    From reading the article, the other major issue is the number of transplants who are sending money elsewhere -- so you have workers who are making money in ND and it's benefiting the economies elsewhere. However, local landlords, restauranteurs, grocers, doctors, builders/contractors & merchants should be able to benefit from such a boom, but the suddenly high cost of living absorbs all of their wages. Until the housing stock gets back into equilibrium, it's going to be a struggle.
     
  3. Stitch

    Stitch Active Member

    It's supply and demand, plus greed because the owners of rental units aren't investing in their property. They just want to collect the cash without doing anything to improve their properties with their profits.
     
  4. YankeeFan

    YankeeFan Well-Known Member

    Who's being greedy? Landlords?

    So, you would charge below market rent if you owned rental property?
     
  5. Stitch

    Stitch Active Member

    In Dickinson, there are two companies that dominate the market. One of those companies have a lot of federally-subsidized units, so they can't charge market rent. Another has a reputation as a slumlord that doesn't fix known problems and is content with taking in rent, knowing someone else would move in to replace them.

    This is where the free market fails, because not anyone can just come in and build apartments. You have to get zoning approval and build to a higher standard than current units.
     
  6. YankeeFan

    YankeeFan Well-Known Member

    Any "fix" to this problem would further discourage building new rental units.

    If there's an opportunity, someone will fill it.

    Yes, sometimes markets get out of wack. And then they correct.
     
  7. Cubbiebum

    Cubbiebum Member

    I work in ground zero of the oil patch and yes the landlords are being incredibly greedy and the town is looking to pass laws to stop it.

    An example of what is going on is a small apartment complex with crappy apartments built in the 80s just sent all its residents a letter giving them 30 days. Rent was then going to go for 600-800 to 3,000. It's not a matter of market value. It's a matter of gauging people.

    Anyways, most oil workers can afford it (barely). It is priced at the top level of which they can afford. Problem is only about 2/5's to 1/2 of the residents work in the oil field. The rest of us work regular jobs making for the most part regular wages. This was a town that prior to 2006, the average house was $60,000 or so. The same houses (yes exact same houses) are being sold for $300,000 to oil people.
     
  8. deskslave

    deskslave Active Member

    And no one with a lick of sense builds new apartment complexes in oil boom towns.

    But fear not: The market will sort it out!
     
  9. Stitch

    Stitch Active Member

    The market works great if your homeless. You get free A/C and use of their bathrooms.
     
  10. dirtybird

    dirtybird Active Member

    Ahhh, the system works
     
  11. YankeeFan

    YankeeFan Well-Known Member

    I'm betting someone will

     
  12. dixiehack

    dixiehack Well-Known Member

    "Why wouldn't you charge $12 for a gallon of gas and $50 for flashlight batteries?" YF during hurricane evacuation.
     
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