GILLETTE, Wyo. (AP) – Shane Larson works in the oil fields during the day, then retires to the Way Station at night.
It’s not that he doesn’t make enough money to find another place to live other than the local transitional housing shelter. It’s actually the opposite. Although he doesn’t qualify, Larson said he’d even be OK living in designated low-income housing. Like many who are finding work in the burgeoning Campbell County oil fields, Larson has learned that making a good wage means little if there is no housing available to rent.
Add to that the rule of supply and demand, which has landlords charging higher rents, even in what he would classify as iffy neighborhoods.
“I’m overqualified to live where I’m comfortable ... (or) I live in the ghetto where it’s expensive,” Larson said. “I just want a normal, middle-class apartment.”
It’s finding that middle-class living space that’s become the problem for Larson and many others. The apartment vacancy rate in Gillette has shrunk to 0.7 percent, the lowest since 2009 when the rate was 0.1 percent.
Every four months, the city asks 13 complexes the number of apartments they have available. At the end of September, there were 12 of 1,691 apartments available to rent.
Most claim that a resurgence in oil production in Campbell County is responsible for the housing shortage. Experts aren’t calling it a boom yet, but the word is thrown around often in the housing world.
“If it’s not a boom, I don’t know what it is then,” said Jim Spainhower, manager for Real Estate Systems.
He said that in November 2013, he had two or three pages of rental properties available for people to move into immediately. The Real Estate Systems website recently listed four properties available, with another four available mid-November to December.
ERA Priority owner Josh McGrath and his partner rent out properties together. He said a two-story town house opened up at the beginning of November, the first time in several months a rental property became available.
“I think it’s ultra-competitive right now,” McGrath said. “If someone hears we have one opening, we’ll get eight, nine, 10 phone calls for it.”
Low Gillette vacancy rates have driven up rents for almost all of the apartments in the city. It’s common to see a two-bedroom apartment renting for about $900.
The mineral industry has picked up, and there are more people in Gillette for short-term jobs who don’t want to be committed to long-term places, like houses, McGrath said.
“It’s the law of supply and demand,” he said.
Rents have jumped almost 9 percent in Campbell County from June 2013 to June 2014, according to the Wyoming Economic Analysis Division. During the last housing scramble between 2004 and 2009, rents increased about 37 percent.
Michael Surface, senior planner for the city of Gillette, makes those quarterly vacancy calls. He said the complexes reported “they were really busy” in September, and the vacancy shortage may become worse before it improves. During the last shortage, it took two years before a new apartment complex was built. Surface said he thinks it will be the same this time as well. So far, only a few people have inquired about building new complexes, but none are in the works.
Kevin Berg and Johnny Stazzone came to Gillette in April to work for six months as oil field inspectors. They found an apartment fairly quickly.
“But that was in April,” Berg said.
He and Stazzone both know that, in the oil business, housing can be a real problem for industry employees, who need more than short-term housing but may not be in the market to build or buy a home.
“We picked a complex because they can’t change the rent on you,” Berg said.
They paid about $1,300 for a two-bedroom, furnished apartment with all utilities included. Two months after moving in, 22 people were on a wait list for their complex.
Even low-income housing, which is required to follow strict income guidelines that often preclude energy industry workers, is at its limit in Gillette.
“Across the board, we’re pretty full,” said Konnie Hubert, property manager for Highland Property Management Inc. “In the past, we struggled with vacancy, but with this boom coming in, we noticed it immediately.”
Highland Property has three locations in Gillette, and there are only a few spots open, she said. Rents for low-income apartments have increased a few times in the past year to now where a one-bedroom apartment rents for $696.
Linda Scherr, who was director at the Council of Community Services for years, said those higher rents are a struggle for a lot of people.
“It’s a vicious cycle,” she said.
The Council of Community Services sees people who are often undereducated and would be prime candidates for service worker jobs, like serving. But those jobs don’t pay enough for people to afford current rents, even at low-income complexes, she said.
“We’ve see more people longer term in our shelter,” Scherr said. “Since the vacancy rate is so low, they will not be able to transition out into the community as they’ve previously hoped.”
With Campbell County’s vacancy rate for rental properties almost zero, pickings also are slim for those in the market to buy a house – or at least slimmer than a year ago.
The number of people trying to build new homes in the county and city is picking up steam, Surface said.
At ERA Priority Real Estate, agent Sherry McGrath said some people are also choosing to build their own homes rather than buying one.
“The newer construction is far more popular,” she said.
The trickle-down effect from the shortage of rentals available is noticeable in the overall housing market, Sherry McGrath said.
“It’s much busier than, say, a year ago,” she said. “We’re not seeing prices drop as much as they had before.”
ERA Priority sold 348 houses in 2013. Through nine months of 2014, ERA has already has eclipsed that with 380 homes sold.
Pete Smith, Council of Community Services interim director, said he moved to Gillette because his daughter lives here.
“We started looking (for housing) here a year ago,” he said. “It’s been horrible, because we think the prices are a little inflated.”
He and his wife own goats and want a place with some land to house the kids. The house they had in Boise, Idaho, had a few acres and was worth about $300,000 there.
A comparable property here “would have cost about $1 million,” he said. “I was flabbergasted. We shopped and we shopped.”
Riley Hunter, Berkshire Hathaway HomeServices Preferred Real Estate broker, said there are about 330 houses for sale in the city and county. While he doesn’t have numbers from last year, he believes there are at least 100 more houses for sale than at this time in 2013.
One reason for that could be that oil workers are renting rather than buying, which prompts other more permanent residents who may prefer to rent to buy a house instead, he said.
“Pipeliners are renting,” Hunter said. “What that does is increase the housing market. They fill up rentals.”
