Over the last few weeks, I've written several times about the affordable housing crunch in big cities where amenities and high-paying jobs are drawing workers to places like Washington, San Francisco and New York that aren't building new housing fast enough to keep up. Not surprisingly, rents are rising at the intersection (or, rather, the mismatch) of these two trends. Caught in the middle, existing residents have watched their rent rise and their housing options shrink.
This more or less describes what's been happening around the latest tech boom in Silicon Valley. But reader Adrienne King e-mailed to point out another part of the country where something very similar is taking place: stretches of rural Ohio and Pennsylvania that are now in the midst of the fracking boom.
Rent is famously skyrocketing in North Dakota oil boom towns. Appalachia has gotten a lot less attention. But what's happening there provides some fascinating points of comparison and contrast with housing shortages in big cities like San Francisco. Rural shale country communities don't have a lot of excess housing stock to start with. Where fracking sites are located far from big cities, commuting in isn't really an option for new workers. And the communities themselves are often — and understandably — hesitant to build new permanent housing for an out-of-state workforce that's not expected to stick around.
As a result, RV parks are booming (as are, apparently, violations of local laws about what constitutes an RV park). From a report out this spring on Carroll County, Ohio, from Policy Matters Ohio, the temporary nature of fracking workers and the rural setting of their work have combined to reshape the housing market in some other ways:
Oil and gas workers looking for permanent housing are able to pay higher than market rent because of per diem payments from employers. For rental property owners, this means increased rental income, but it also changes the nature of the rental market. Oil and gas workers want rentals furnished and equipped with items like pots and pans, televisions and cable. To cater to this market in the last year and half, Newell Realty, a small, locally based family business started in 1943, has begun offering and managing rental properties. A second-hand furniture market is developing. Furniture that once went for $5 now sells for $50, according to one resident. There is a significant amount of property rehab, with residents fixing homes for rental. This brought an increase in business to the local ACE hardware store. Retail trade for building materials and garden equipment and supplies increased 28 percent from 2011 to 2012 in Carroll County, according to sales tax data.
Anecdotally, locals report that two-bedroom homes that recently went for as little as $400 a month are now going for more than $1,000 a month, with larger homes becoming group houses for oil and gas workers. The consequences are mixed for longtime residents, who benefit from the influx of money (as landlords, shop owners, beneficiaries of tax dollars), even as they may be hurt by higher housing costs.
In San Francisco, the policy prescription is clearer: The city needs to build more housing, and local residents concerned about affordability would be wise to support those efforts. But it's hard to argue unequivocally in east Ohio that rural communities should dole out more new housing permits (and pave new roads and lay new sewer lines) for today's temporary workers who may not be around several years from now.