Young couples feeling the pinch of Williston's single-family home market
WILLISTON, N.D.—She works at Smiling Moose, and isn't looking for a home to buy. That's not because 22-year-old Sarah Villamore and her husband don't want to, however. It's because the Williston native has given up on finding what she and her husband can afford in the Williston market. It just doesn't exist yet.
"It's difficult if you are a millenial trying to buy a home," Villamore said. "You don't want to buy the cheap, crappy ones because then you are just throwing all your money away."
Villamore is just one of the 6,000-some apartment dwellers in Williston, and part of a large percentage of service workers who would love to buy a home right now — if Williston just had an affordable one to offer a couple with a combined take-home pay of say $4,000 a month.
Villamore was working hard to deliver coffee and sandwiches with a smile Thursday morning, while city and community leaders meanwhile gathered to talk about the single-family housing shortfall in Williston.
Mayor Howard Klug noted that he'd seen a number of homes for sale on the way to the Williams County Commission meeting room, and said he was perplexed by that.
"I'm here for you to tell me what the city can do to help out the housing situation," he said. "You're telling me there is no inventory out there, but on the way here I counted five or six houses for sale, so I really don't understand what is going on in the market here in Williston."
Klug said he understood the importance of the conversation, however. Capturing the hearts of millennials coming to Williston to work has been a topic of much discussion lately, particularly with the Governor's Main Street initiative being held this week as part of Economic Development Week.
Gov. Doug Burgum talked extensively about what cities need to do to capture the young workforce of today during his roundtable session on Tuesday, and at the unveiling of the Sloulin Field master plan Tuesday night.
Running through the numbers
Apartment dwellers like Villamore would probably snap up at least 300 homes in all right now if Williston had them to offer, Williston's Development Services Director Mark Schneider estimated. He based that on conversations with area apartment managers.
But those apartment dwellers hungry for homes are just the beginning of single-family housing demand in Williston.
Based on a study of the area by AE2S, WIlliams County is likely to grow 67 percent, Schneider said. Assuming even growth, that would add 20,770 people to Williston's population between now and 2029.
That's 1,888 new people per year, Schneider said. At four people per household, that's 472 more new households per year, for the next 11 years.
A majority of the buyers right now are millennials, according to Realtor John Voll. Of the 163 listed homes on the market right now, only 28 fall into the $250,000 to $330,000 "FHA sweet spot" that best fits the average millennial's desires and pocketbook.
Of those, however, only 12 have what millennials want in their first home purchase.
"Williston is the No. 1 destination for millennials," Voll said. "And when they come here, they are not looking for 1950s, 1960s homes. They are looking for newer homes, with newer appliances. They want open floor plans, a two-car garage and a nice yard that's fenced. That's been the market, and it's pretty strong here."
Neither Williston nor Williams County are building anywhere near the number of homes in demand by millennials right now, Schneider said. Williston has eight new home permits and Williams County has between 30 and 40 for the year so far — a huge shortfall.
But it's not just millennials at stake, Voll added.
"You are really shutting out that lower market," he said. "In the $150,000 to $175,000 range, there's nothing out there that is brand, spanking new."
Working through solutions
One obstacle to solutions is the shortage of programs that can be used for purchasing or building single-family homes. Most federal and state assistance is for multi-housing units.
What little single-family funding exists is tied to income levels, and Williston's workforce, with its rising wages, generally don't qualify.
"This has been an ongoing problem for the region," said Everette Enno, Director of Tri-County Regional Development.
He mentioned a federally funded block grant, which got a boost recently. The governor, however, can take 50 percent of that off the top for infrastructure grants to the region, which has left the area with just $192,000 remaining in the fund.
That money can be used, however, to fund renovation of existing single-family homes.
Renovation of existing fixer uppers could help solve some problems in the short-term, Voll suggested. Williston has about 200 of what he called "ugly ducklings."
These are older homes investors bought and rented out for $1,000 a room. Many are in disrepair. But they are often in nice neighborhoods and, potentially, an easy flip for those with the know-how.
American State Bank and Trust Company has a loan program that could help rehab these ugly ducklings and make them presentable, affordable homes, Voll said.
Joan Mainwaring, VP and Real Estate Department Manager with American State Bank, explained that the Fannie Mae program can lend up to $400,000 on a home needing work, with renovation 75 percent of that total amount, so long as the added items are adding appropriate value to the home.
Income limits for state loan programs to assist the community were recently bumped to $98,000 in Williston, leaving the impression with many decision makers in the eastern part of the state that everyone in the Oil Patch is making a lot of money. But a substantial portion of the workforce here makes much less than that, she said.
The salary for an entry level police officer in Williston is $61,000 a year, Mainwaring said, and they cannot get into affordable homes in Williston.
She's urging community leaders to support funding for a Housing Incentive Fund measure that passed last biennium. It allows financing for essential service workers to get into homes.
It's not a grant, it's a loan that gets paid back to the HIF fund.
"No one knows about it because it wasn't funded," she said. "We are going to need your help next session to get it funded."