- Associated Press - Sunday, May 17, 2015

WATFORD CITY, N.D. (AP) - Watford City’s oil-invested construction boom is going gangbusters this spring, with no obvious sign that drilling has slowed by half in the oil patch.

New construction rings the city, which now takes in roughly a 5-mile square with an extra-territorial zoning footprint the size of Minot, the Bismarck Tribune (https://bit.ly/1PFlXeT ) reported.

Hammers are pounding, cranes are swinging and construction workers’ boom boxes belt out rhythmical background music.

It is raw, dusty and exhilarating, though some of the new projects with classy names, such as Hunter’s Run, Pheasant Ridge and Prairie Heights, are starting to take on a settled look with green sod and kids’ play sets.

Steven Williams, the city’s building inspector, oversees this construction craze to ensure that it meets building and zoning codes.

Some are modular pieces stacked together and failing final inspections, he said.

“People are throwing up buildings as fast as they can and plan to pay it off in two years. That’s the nature of the boom,” he said.

Some is outstanding work, with attention to style and substance.

And right now, a substantial portion of the new construction is for rent, not for sale.

About 1,500 living units, from duplexes to sprawling four-story apartment complexes, were permitted this year and last.

Most of that will be ready for their new residents this year, putting the ratio of apartment-style rentals to single-family homes at 8-to-1, Williams figures.

“There’s not been many homes,” he said, running through a few spread sheets and plat maps in his city hall office.

“But here’s the good news,” he said, smoothing out a spreadsheet that shows 29 homes were permitted this year so far, compared to 47 for all of last year.

It’s those homes, where families put down a financial stake and roots, that will give the growing city the permanence it needs for the long haul, according to Williams.

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Mayor Brent Sanford said nearly everyone would agree there are getting to be too many apartments in the mix, but he says they are a necessary part of the transition from boom town to hometown.

He says the community is eager to be home to the thousands of oil workers in the area and he is starting to hear talk among developers about how to approach that challenge. The debate is whether the economy is robust enough for a developer to go all-out with 30 to 40 homes, or if the right approach is to start with several and see what the market wants, he said.

A perfect place for that could be a subdivision named The Highlands, near the water tower where a new arterial road will be constructed with the town’s surge funding and near where a second elementary school is planned.

The Highlands sits in a quasi-rural setting, with paved streets, curb and gutters and a small play park. But it is eerie right now, because there is not a single structure on any of the streets, much less any children.

“I really would like to see 100 single-family homes come up this summer. I think we’re really underserving that market. I hope we turn a corner here,” Sanford said.

Rents aren’t leveling off because even $3,000 a month remains a good deal for corporate renters compared to hotel-motel rates for employees, he said.

It’s time for the $270,000 home and a $1,500 monthly mortgage for people who’d rather skip the apartment phase and go directly from the RV camper to a home, according to Sanford.

“Then they’re Watford City folks, they’re on our boards and the parent-teacher organization. They have so much more invested, and they are so much happier,” he said.

Watford City had 1,700 people in the 2010 Census, and two studies show it could grow to 20,000.

Those estimates are based on the potential for 55,000 to 60,000 oil wells within the next 20 years, which is where Department of Mineral Resources director Lynn Helms has said the Bakken play is headed.

Today, there are 13,000 producing wells, but recent months have seen a slide in the price of oil and the number of rigs drilling dropped sharply from 186 in December to 86 this week.

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Williams said some of the apartment complexes are seeing 40 percent occupancy and one was at 80 percent vacancy over the winter, though it’s starting to fill now.

As long as developers meet approved zoning uses, there is no way to slow apartment construction and another 105 acres of high-density development was just approved by the zoning board this week.

Conversations about slowing apartment construction may be looming soon, according to Sanford.

Still, Brock Metzka, who pulled up to greet Williams, said he’s not going anywhere.

Metzka is construction supervisor for the Stallion Meadows project, which consists of 18 fourplexes north of Watford City with, appropriately enough, a producing oil well just across the fence line.

The project is one Williams admires for the sophisticated design and quality of materials.

Metzka said the money for the project is cash in the bank and his investors aren’t going to blink just because oil isn’t drawing all the cards right now.

“They’ve been through major bumps in Las Vegas; they’ll be riding it out,” Metzka said.

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Watford City saw a whopping $161 million in building permits approved last year and just $5.6 million so far this year, nearly all of it in those 29 single-family homes permitted since January.

Williams said the construction craze numbers don’t include the $51 million for the new high school under construction on the southeast side of town, or the $101 million for the adjacent events center that is in the prep and footings stage under an at-risk building permit, waiting final geo-tech reporting.

He, too, would like to see a housing transition start to take shape.

“In 10 years, that’s the scary part. You don’t want 80 percent of your population living in an apartment and paying rent. I am worried about that, but an apartment’s a better choice than an RV. We need housing of all types, for the aesthetic charm of the community,” Williams said.

That said, Williams said he liked Watford City when he pulled up four years ago, and he likes it now with all the new retail opportunities and amenities.

“It’s a great little spot in the world. We are making history here,” he said.

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Information from: Bismarck Tribune, https://www.bismarcktribune.com


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