Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Update on battle over crew camps in Williston

Lousy photo by James Ulvog of a man camp near Ray, North Dakota.

Lousy photo by James Ulvog of a man camp near Ray, North Dakota.

The fight over whether to shut down all man camps in Williston isn’t over.

3/19 – Bismarck Tribune – Man camp operators will fight back – The Williston city officials will have a second read of an ordinance to force all man camp operators within their reach to shut down. Target Logistics has dropped into the discussion a threat to sue if the city doesn’t give them more time to close down in an orderly manner.

The core argument is made yet again through an interview with a rotational crew worker. He works two weeks straight and then has two weeks off. Working twelve hours a day, plus time to get ready in the morning and turn in at night leaves little time to prepare food or do laundry.

A crew camp provides both. An apartment and hotel does not.

An apartment or house landlord won’t allow someone to rent two weeks each month. Crew camps do.

The Target Logistics VP says they are running at 40% capacity, which they can handle with reduced staffing. If the city prevails, they will relocate their facilities outside the reach of the city.

The core error by the city leadership is that they are assuming that the level of activity today will be the level of activity forever. They think there will never be a surge in drilling with the resulting surge in temporary, rotational workers.

One worker is quoted as saying he would get a camper and park it somewhere before renting an apartment.

The director of the ND Petroleum Council is concerned that Williston could return to the camper cities of 2009 if there is an increase in drilling. Actually the better comparison would be a return to the camper times of 2009, 2010, 2011, 2012, and 2013.

3/22 – Rob Port at Say Anything Blog – The Folly of Williston’s War on Mobile, Temporary Businesses Is Now Clear – Mr. Port points out the leadership in the city has been trying to prevent temporary businesses from operating in the city for many years. This includes man camps, RV parks, and even food trucks.

Keep in mind that forcefully shutting down any alternative form of housing was a major part of the backdrop during filming of the documentary The Overnighters. The city was insistent that a church providing temporary housing stop helping people in need.

The current slump in activity shows why temporary facilities are a good idea. Those RV parks have folded up on their own. The food trucks have moved on. Without orders from the city, many man camps are shrinking or even closing down. When there is no economic demand for short-term or uncertain-duration housing, that housing will disappear on its own. If they are needed, the mobile businesses and temporary housing will come back when the economic conditions are right.

Mr. Port says apartment and hotel investors are claiming reliance on city promises that the man camp housing would be temporary and would soon go away. Such a promise by the city was unwise. If that caused overbuilding it is the fault of the city.

There is another possible cause for what is perceived to be overbuilding. I think this alternative is more likely than reliance on that promise from the city. More likely is that developers built stuff and investors funded it on the false assumption that occupancy rates (close to if not actually 100% for every landlord), rental rates (outrageous even compared to California), and waiting lists (months-long, even for apartments under construction) that existed in 2012 and 2013 would continue forever.

If you invested in an apartment building on the assumption that there would be 30 years of near-100% occupancy and 30 years of rental rates three or five times higher than prices were a few years ago, I know exactly where the blame belongs for any financial distress you feel.

I actually saw comments in printed articles that apartments were funded based on permanency of then-existing pricing and occupancy. I referred to those comments some time ago, but I won’t bother to go find the link.

Mr. Port’s summary:

Mobile businesses can be moved when demand dries up. Permanent business cannot, and become vacant eyesores.

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