If you don’t already have a place to live in Douglas, good luck finding one. Few homes hit the market, and prices have risen by 10-20% for the few that do.
Macey Moore of Remax said that Douglas faced a similar housing crunch during the last boom in 2012, when availability was low and demand was high. She noted that affordable, available rentals are anomalies.
“We have zero availability and a large wait list, and I’m hearing that consistently,” she explained.
It’s not just sales and rentals that have become scarce. Hotels save rooms for walk-ins, but are otherwise full. Hampton Inn Sales Manager Zach Martinez said that a quarter of the energy workers at his hotel stay longer than a month.
With the housing market tight, and more workers expected in the coming months and years, developers have gradually begun to build again. Douglas has received seven permits for new houses since Jan. 1, and another permit is pending. At this time last year, the city had only seen three permits, and officials issued 11 in 2018.
Those 11 homes in 2018 represented a 1000% increase over 2017, when developers only built one home in Douglas. The recent spike in development still hasn’t reached the levels of the last boom. 2014 and 2013 saw 40 and 37 homes built, and it has been six years since Douglas saw a new apartment complex.
More explosive construction could be just around the corner, though, as developers eye the growing demand in Douglas.
“There are a couple of big dogs that are trying to decide whether to break loose,” Converse County Commissioner Jim Willox said in a housing study work session May 6.
Thousands of workers are expected to flock to Converse County in the coming years, with a big wave possible this summer. The Converse County EIS, which proposes the drilling of 5,000 new wells over 10 years, projects the county’s population to grow by 6,000 during construction. The Cedar Springs wind farm north of town will also bring more than 250 workers, with many expected to live in Douglas.
In order to better understand housing needs, Douglas, Converse County, Glenrock and Rolling Hills paid for a housing study by Community Partners Research. On Monday, CPR’s Scott Knudson recommended that Douglas and Glenrock work to get 700 new housing units between now and 2025 to keep up with the boom.
SAME OLD STORY
Douglas has faced housing shortages before, as have many cities with boom-and-bust economies. Part of the problem is that during busts, developers have little incentive to build, and because the oil and gas industry is so unpredictable, few are willing to gamble and construct new homes in anticipation of the next boom.
Like developers, local governments tend to be cautious, too. Cities fear overbuilding. If new housing pops up to meet demand during a boom, the population decline brought on by the bust can lead to vacant properties, which can have negative impacts on communities. Municipalities often find themselves in a delicate situation and respond slowly to increased demand in order to hedge against empty buildings down the road.
“The last thing that we would want is something that ended up becoming just vacant and dilapidated,” City of Douglas Planning and Community Development Director Clara Chaffin said. “But I also want to see that the need of the community is met.”
Chaffin noted that developers could remain wary, even as hundreds of workers keep rolling into town.
“There are times that there is a demand there and it’s simply not met or seen by the development community or the real estate community,” she said. “We also have to remember that while there’s a perceived demand at this point in time, what portion of that demand is, long term, going to be staying in our community? And what portion is our temporary need?”
City and county officials fear a repeat of Douglas’ last bust in 2016 and 2017, when vacancies were common.
In the draft version of a new housing study, CPR recommended that Douglas and Glenrock build a total of 700 permanent housing units over the next six years. The study is only in the draft phase, and some figures within the document could change.
Knudson recommended that Douglas build 600 new, permanent units, 210-240 for owner occupancy, and 360-390 for rentals. He recommended Glenrock build 100 units.
Chaffin and Willox said that the recommendation sounds reasonable if it includes properties constructed in the county, not merely within the Douglas and Glenrock municipal limits.
LABOR COSTS HIGH
The slow response to demand isn’t merely the result of cautious developers. Labor costs have risen dramatically in recent years, and Wyoming has struggled to find workers.
Tri Mountain Homes President John Alt said labor shortages play a big role the lack of new housing construction and rising costs.
Alt pointed out that high demand for construction work in Colorado, which began during Douglas’ last bust, drew many skilled laborers away from Converse County and Wyoming. Colorado construction jobs pay well, so even when home builders see opportunities here, the competition makes labor more expensive.
Tri Mountain Homes currently has three permits pulled for houses in Douglas, and Alt said the company plans on building more. He said that housing is very hard to find.
“There doesn’t seem to be any (housing available),” Alt said. “Even places to stay for guys working on houses is tight . . . It looks like there’s going to be a lot of activity for a long time to come.”
WHAT CAN GOVERNMENTS DO?
Government officials hope to address the lack of housing availability. Douglas Mayor René Kemper said she’d like to see new housing built downtown, especially in otherwise-empty locations. She also said the city plans to explore easing restrictions for developers, although it’s unclear exactly how the city might do that.
Douglas and county officials have few tools to incentivize development. In some states, municipalities can entice developers by offering tax breaks. In Wyoming, there may be opportunities for local governments to help developers by paying for infrastructure costs and developing a property, but otherwise options are limited.
Glenrock Building and Code Inspector Scott Gilbert said it’s important for Douglas and Glenrock to act now.
“We always sit at the same spot at the beginning of a boom,” he said.
“Do we, do we not? Do we, do we not? Then after it’s all done we go, ‘God, I wish we would’ve.’”
With the prospect of as many as 5,000 new wells looming on top of the 1,821 completed wells already drilled (as of March) and an untold number some floating around somewhere in the permitting process (the Wyoming Oil and Gas Conservation Commission had issued 14,609 permits as of March), Willox hopes to obtain better socioeconomic monitoring and forecasting. He has attempted to persuade the BLM to mandate energy companies provide their long-term plans to a third party, which would then aggregate them. That way, Converse County would have a better idea of what to expect and when.
Converse County representatives hope to lobby Secretary of the Interior David Burkhardt to make the idea become a reality.
The housing study and socioeconomic monitoring could be steps in the right direction. The more information developers have, the more comfortable they will be investing.
“It’s a good problem to have, we just need to work hard to solve it,” Kemper said. “It won’t last forever.”