A boom in rental rates
WILLISTON, N.D. – Phyllis Larson has a small sign hanging in her apartment kitchen. It reads, “Grow old with me, the best is yet to be.”
Unfortunately for the 76-year-old, the best might have already passed, at least when it comes to her living situation.
Larson is facing a rent crisis. When she renews the lease on her two-bedroom apartment in the coming months, her monthly rent will increase from her current rate of $1,350 to $1,550.
That’s more than triple the $500 Larson paid 11 years ago when she retired from her hospital job in Spokane, Wash., and moved back to Williston to enjoy her retirement.
Her hometown, where she grew up helping her dad on the farm, has become the most expensive place to rent in the United States. This has become a major problem for Larson and other older, retired residents who can’t keep up with giant rent increases associated with the oil boom.
Larson’s predicament also has kept her from enjoying her retirement so far. When she returned to Williston, she worked a few days per week at a nursing home to keep busy, but when her rent increased to $1,350, the part-time job became necessary to supplement the income she drew between Social Security and retirement. She also sold her computer and other nonessentials in her apartment.
But for Larson, now officially retired because of health problems, the $1,550 monthly rent is too much for her to afford. She said the rent increases have been devastating, especially for someone who worked her whole life.
“I’m used to work,” Larson said. “I’m a workaholic. Then I thought I could take it easy, (except for) the doggone rent.”
When Larson got the notice of the final raise, she knew she was going to have to move.
“I told the (landlord) you can just take me out to a Dumpster and make my home there,” Larson said.
Laurel Fixen, the property manager of Century Apartments, said $1,550 is the going rate for a new lease on a two-bedroom unit, and all tenants are given 30-day notice of their lease expiring, which is when their rent would increase to that rate. Dakotaland Lodging, the owner of Century Property Management, did not return a voicemail when asked for comment.
Even with the notice, Larson needs another option in Williston, where “affordable” appears to be nearly nonexistent.
In fact, Larson’s rent almost seems cheap compared to others in Williston.
No rest for retiree
According to a February post from Apartment Guide, a popular online apartment listing website, the average monthly rent for a 700-foot, one-bedroom apartment in Williston is $2,394, higher than any other city in the nation. The average cost for the same apartment in New York is $1,504, which is still lower than Dickinson, where rent comes in at $1,733. Like Williston, Dickinson is also in the state’s Oil Patch.
Larson has tried to get into affordable, income-based housing supported by U.S. Department of Housing and Urban Development rental assistance programs, but she said her income is too high to qualify. Most of these programs help subsidize a person’s rent so they only have to pay 30 percent of their gross monthly income, which would help people on fixed incomes to afford housing in an area with highly inflated rates.
Larson said her situation has resulted in her “falling through the cracks,” with too much money for most low-income housing but not enough money to afford anything in town.
“We live in the most expensive part of the U.S.,” she said. “We don’t all make oil money.”
Larson said Williston’s housing scenario isn’t fair to the elderly who are no longer working.
“I paid into Social Security and retirement to enjoy life and this is what I get?” she said.
For investors’ sake
As if figures for apartments aren’t scary enough, the situation in Williston’s trailer parks might be even worse.
On March 4, residents of Williston’s Sand Creek Estates received a letter from their new property owner Sound Capital Corp. According to the letter, written by company President Braeden Criddle, residents would experience an easy transition and “minor administrative and operational changes” focused on “enhancing the quality of the community.”
Less than two weeks later, residents found out how the corporation planned to accomplish that: by increasing lot rent from $375 to $800 when tenants renewed their lease.
This lined up with the goals of SCC listed on Criddle’s LinkedIn account, a social networking site for professionals. According to his listed description of the company, SCC is a Canada-based Mutual Fund Trust set up to capitalize on the housing market in Williston and “meet investor needs.”
Criddle did not return a message requesting comment.
But Sand Creek isn’t an anomaly – there are several other mobile home parks where residents have experienced dramatic rent inflation. On June 1, the lot rent for FM Parkway nearly tripled from $300 to $850. The mobile home park’s new property manager, Rick Nice, just took over Friday and could not comment on the rent increase.
A mortgage from April 15 lists FM Williston LLLP’s principal place of business as the mailing address of ReNue Properties, a Scottsdale, Ariz.,-based real estate investment company. Company President Michael Christiansen did not return calls and voicemails requesting comment.
Luetta Vondell, 77, an FM Parkway tenant, has had Alzheimer’s disease for 11 years. Her daughter, Barbara Vondell, 58, is her full-time caretaker, and founded the “People of Williston have had Enough” Facebook group, which organizes meetings with community leaders and city officials to try to tackle problems related to rent costs.
“There’s no way she could pay the $850, so I subsidize her rent and pay the $550 per month it went up, but that’s affecting me because I can’t afford stuff now,” Barbara Vondell said in an interview. “It’s a big vicious circle. How are we going to stop it?”
To answer her own question, Vondell started the Facebook group, which now has nearly 1,700 members. Members of the group share information they have about rent prices in various apartment complexes and trailer parks so they can try to keep track of who or what exactly is responsible for the steep hikes.
There is so much paperwork that someone bought Vondell a binder for her birthday for her to put it in.
She said she has a hard time following all the housing developments going on with all the new out-of-state investors.
“Williston doesn’t even belong to Williston anymore,” Vondell said.
Elm Estates, another Williston mobile home park, is also listed on ReNue Properties’ website. Elm Estates has a predicament for current residents even more complicated than that of residents in other mobile home parks.
Last September, tenants in Elm Estates received a notice that lot rent would increase from $350 to $750 starting Nov. 1, 2013. In mid-October, another notice followed that left tenants with three options: sign a one-year lease locking in at the new $750 monthly rate, sign a month-to-month $750 rate subject to rate changes or sell their trailer and have it removed from the property. The company wouldn’t allow people who purchased the trailers to live in the park. Why? New trailer homes are being put in the park, with lot rent set at $2,800 per month.
Vondell said keeping track of which company owns which trailer park is nearly impossible because the new owners are setting up a system of limited partnerships and limited liability corporations in North Dakota to “hide behind.”
She said the group’s next step is to stay in communication with city government to see what options are available.
“The city government is doing what they can and trying to come up with solutions, but none of the people in the community knew anything about what they could do or what they couldn’t do,” Vondell said.
According to the North Dakota Century Code, political subdivisions aren’t allowed to enact or enforce any rent control measures, so Williston is limited in what it can do to stop the rise in housing prices.
Vondell said the group has been contacting state government to try to get some sort of grandfather clause established for the elderly to keep their rent from astronomical increases. While that would still leave other people without oil-inflated incomes unable to afford housing, it would be a start.
Gary R. Sukut, a Williston native and Republican member of the state House of Representatives, said there haven’t been any serious discussions considering rent control because of the area’s great opportunity for oil-related economic development.
He said if rent-control prohibitions in the Century Code were to be repealed, jurisdiction would fall to local political subdivisions, such as city or county government. The problem is rent control would hinder local economic development for these subdivisions, he said.
“Most communities are trying to encourage and build economic development, and when it comes to new construction, rent control discourages economic development in that area,” he said.
Sukut said a more viable solution would be to raise and then make available more Housing Incentive Funds. The HIF offers a tax credit to businesses that contribute income tax dollars to it, and the HIF is then used to fund the construction of income-based housing units. For example, if HIF was to fund 10 percent of a commercial development, 10 percent of the units in that property would have to be eligible for income-based or affordable housing programs.