North Dakota: No longer the final frontier
There was a time, in the very recent past, when parts of North Dakota resembled the boomtowns of the US gold rush of 1848. This time, prospectors arrived in cars and RVs rather than on the backs of horses, and it was the riches of black gold they were after as opposed to yellow, but the rough and ready atmosphere bore an unmistakable resemblance to the days of those early pioneers who headed west to seek their fortune.
Robert Gavin, Group CEO of specialist accommodation developer NDD Group, operating in North Dakota comments,
“There really was an electric atmosphere in many North Dakota towns in the early days of the oil boom, with so many predominantly male workers heading to the state to be part of the black gold rush. It was a work hard, play hard atmosphere with a real frontier feel to it.”
While in many respects the state flourished as a result of the boom, it also had a darker side, with traffic accidents increasing and homelessness rising dramatically due to far more workers arriving than there were beds available.
Fast forward just a couple of years and North Dakota has turned those early boom days into a mature oil play with a welcoming family environment. Workers’ loved ones are joining them in increasing numbers as the oil play continues, showing solid performance despite decreasing oil prices.
Road safety has improved, with traffic deaths falling 13% from 2012 to 2013, according to the North Dakota Department of Transportation. The state’s crime rate is also well below the national average, based on figures from Neighbourhood Scout. Violent crime stands at 2.7 per 1,000 residents, against a national average of 3.8 and property crime in North Dakota is 20.94 per 1,000 residents, while the national average is 27.3.
A plethora of other infrastructure projects such as new roads, school expansions and building up decent quality housing stock are either underway or have already been completed, though the shortage of appropriate housing is still acute. Robert Gavin explains,
“2013 was a really bad year for homelessness in North Dakota. The number of homeless people here jumped 200%, to a rate of 28.6 per 10,000, according to the US Department of Housing and Urban Development. The national average rate is 19 per 10,000. It was the biggest increase of any state and still more workers were arriving.”
The situation improved in 2014 thanks to the expansion of the state’s housing stock by developers like NDD Group. North Dakota Coalition for Homeless People executive director Michael Carbone observed,
“This was the first year in several years that our numbers have gone down and I’m quite thrilled about that.”
NDD Group’s two latest projects are set to help the situation even further. The Transhudson Hotel – Parshall will provide 408 suites with double beds, en suite bathrooms and kitchenettes, while the Transhudson Apartments – Williston Heights will include a further 570 units, mixed between studios and one bedroom apartments.
Both opportunities are currently available for investment, from $89,950 and $150,945 respectively. The hotel offers assured net yields per year from 15.55% and the apartments up to 11.29%, with rental income of 56.45% assured over 5 years.
The construction of such high quality accommodation will mark a further stage in the journey of North Dakota’s towns from pioneering frontiers to mature family environments.