With housing shortage in western ND, some look to make a buck

2011-07-02T20:00:00Z With housing shortage in western ND, some look to make a buckBy LAUREN DONOVAN Bismarck Tribune Bismarck Tribune

BEACH - Bill Holzwarth feels like a marked man in town.

He's taking heat in Beach for buying apartment houses, evicting the tenants and making an exclusive housing deal for employees of Power Fuels, an oil field service company.

Those who were displaced either moved away from town, or found somewhere else cheaper to live.

Part of the rub is that Holzwarth is not a faceless oil corporation, but a local citizen who is branch manager at Bank of the West on Main Street and who has coffee every morning at the same restaurant where one of the displaced tenants is employed.

In that respect, it's personal. It's also and perhaps unfortunately, a fact of life in a growing number of oil patch towns.

Beach is still somewhat removed from the oil drilling boom. Of 173 rigs in North Dakota, only one is in Golden Valley County, where Beach is the county seat.

It is not totally out of the fray and it is well positioned for Power Fuels, which services wells in North Dakota and Montana.

The problem is that the loss of relatively cheap housing affects those who need it most and who the towns need most - the waiters, the store clerks, the grandparents, the starting teachers and cops, and the like.

Jessica Thomasson, a housing specialist, develops affordable housing projects for Lutheran Social Services. The agency will start work this fall on a new nine-unit rental complex and rehabbing three existing homes in Beach.

The agency is working to put affordable housing throughout the oil patch, with projects in towns like Parshall, Stanley and Belfield.

"It would be unfortunate if North Dakota found itself in the same situation as Colorado, where there is no housing for the low wage earner," she said. "I hope we're able to figure it out before we get there."

In Beach, Holzwarth's most outspoken critic is local businessman Jerry DeMartin.

He said someone has to speak up for the single mother of a 4-year-old boy who Holzwarth evicted and the widow whose rent he doubled.

DeMartin said a lack of decency toward others changes the character of a community.

"I've got nothing against making an honest buck in the oil industry," DeMartin said. "This is not illegal, but it's not morally honest. There's no honor in putting someone out in the street. That little kid just lost his bedroom where he sleeps at night."

From his work at the bank, Holzwarth said he frequently hears from people looking for investment opportunities. He said it was only a matter of time: Either he bought the apartments, or someone else did.

"Someone else was going to come in and buy these, I knew it was going to happen," he said.

He kept one of the original tenants, the widow DeMartin talks about, who is good friend of Holzwarth's wife. He did raise her rent from $300 a month to $750, a little less than the other apartments.

For those, he gets one check from Power Fuels and he said the company takes care of credit checks, drug tests and keeping the apartments filled.

"The intent was to make it easy for me. It was a hard decision to do, but we thought we were saving (his wife's friend from being evicted by someone else)," he said.

Carolyn Weaver, owner of the Backyard Bar, sold one of the apartment buildings to Holzwarth. She said she and her husband, Jim, didn't sleep the night they heard the eviction notices went out.

"They were all good people," she said. She doesn't think it's a matter of greed on his part.

"That's the hard part about oil, you can get more money, but if it goes away, all that's left is the people who were here," she said.

Traci Cunningham, 24, and her son, Dean, 4, were evicted from the apartment building Holzwarth purchased from Cunningham's employer, Natalie Murato, who owns the LaPlaya Restaurant in Beach.

Cunningham she said got the eviction news June 2. "It was scary. I didn't know what I was going to do. The thing that bothers me is that I grew up in a big city and that's how they run over there. Here, I thought was different. This man knows me. He knows there's no place to live," she said.

She has since found a house to rent-share with her sister and her sister's children.

Murato said she wouldn't have sold Holzwarth the apartments had she known he'd "kick everybody out. There's such a shortage of housing for the little guys that keep the town running. Bill (Holzwarth) has to know the housing situation. What did he expect these people to do?"

DeMartin said the only thing the community can do is "call him out for violating the standard of decency we live by."

Holzwarth said DeMartin doesn't have the whole story.

He says he did evict tenants initially, but had second thoughts and said they could stay if they chose to, but at the rate of $850 a month, more than double what they had been paying. None wanted to, he said.

Still, he said that's much less than the going rate of $1,200 to $1,400 monthly for small one-bedrooms in Belfield or Dickinson.

Belfield, a town much more centralized in the oil boom, went through a similar situation when an oil-related company recently bought an apartment complex for its employees and evicted the current tenants.

The 12 units that Lutheran Social Services will start building this fall in Belfield will help, but it's only the tip of a housing shortage iceberg, said Terry Johnson, a member of the Belfield Housing Authority.

Single-wides going for $2,000 a month in town are "exorbitant, I think," Johnson said.

Rather than put up man camps, which at least keep temporary workers out of the residential rental mix, Johnson said he wishes oil companies would build permanent quality apartments that would serve Belfield for decades to come.

In the meantime, "I don't know what we're gonna do without the small guy in town. Not everyone makes oil-field wages. I'm concerned about it," Johnson said.

Deb Walworth, economic developer for Beach, said there is no opportunity to talk about the housing situation with "oil," because it's a conglomeration of independent businesses.

"Oil marches to its own drummer, going off on their own and doing what they do for their own reasons," she said. "We try to find housing for those that are displaced."

Walworth said Holzwarth has a right to do what he wants with his own property. "People want to make hay while the sun shines. I just hope they use common sense," she said.

Holzwarth said he would do it differently if he could do it over.

"I am having second thoughts. I invested in Beach and I got beat up a little bit. I would do it again, but I wouldn't evict them and then give them the option. I would have said they could stay at the new rent," Holzwarth said.

"Is this right or wrong? I don't know," he said. "I'm approaching it as an investment."

(Reach reporter Lauren Donovan at 220-5511, or lauren@westriv.com.)

Copyright 2015 Bismarck Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(26) Comments

  1. Kitty
    Report Abuse
    Kitty - July 13, 2011 8:45 am
    Bill is a good man. Everyone's moral decency is tested at one time or another in their lives. I just want to set the record straight that Bill is a member of this community who was willing to invest in it, where many are not willing to do so.
  2. nonews
    Report Abuse
    nonews - July 06, 2011 6:06 pm
    Mr. Holzwarth is a very good American. The people of Beach who do not like what he did should move. There are many people who own empty houses in Beach who will not rent, sell or fix them up. The "town folk" are living in the 1950's. They think, "If your great grand parents didn't live here in 1903 then you are an "outsider" and you can't change anything". Wake up Beach.
  3. crabitha
    Report Abuse
    crabitha - July 04, 2011 8:29 pm
    Just because you can...doesn't mean you should. Unfortuneately, this is just the beginning.
  4. What
    Report Abuse
    What - July 04, 2011 1:52 pm
    It has nothing to do with whether you are Democrat or Republican! It has to do with what kind of person you are. I have more respect for someone who scrubs toilets to make a living than someone who makes the almighty dollar at someone else‘s expense.. It is not “the American way”. That is a cliché that is used to conceal guilt for an action or deed. It is a slap in the face of America on this Independence Day.
  5. stillhatinnd
    Report Abuse
    stillhatinnd - July 04, 2011 11:39 am
    And the "going rate" for jobs that usually make minimum wage have gone up to $1000. a week. Does that mean he's given all of his employees huge raises to 'keep up with the market'??
    I'm willing to bet that the almighty dollar stops with him.
  6. In the Know
    Report Abuse
    In the Know - July 04, 2011 11:13 am
    What you have here is a guy renting apartments at the going rate......and people are paying it. Why should this banker charge a lower rate and subsidize people who can't pay the going rate?

    This is the American way. The Democrats voted for rent control in many parts of the country to stop such a thing. The Republicans voted against rent control. Keep voting Republican!!
  7. What
    Report Abuse
    What - July 04, 2011 9:21 am
    What is legally right isn't always morally right!
  8. mockinthebakken
    Report Abuse
    mockinthebakken - July 03, 2011 11:46 pm
    Oil rules the planet and North Dakota happens to be part of the world. It's no surprise that corrupt local bankers would get sucked into wanting a piece of the action. Just like the crude spilling Exxons and BPs of the world all they ultimately care about is their bottom line. Occasionally they might donate .001 percent of their earnings to show people that "they care". The saddest part is that the identities of many western ND communities have already been lost. What I hear almost every day here in Williston concerning this current housing supply and demand scenario is, "This is the Ameircan way so it just has to be accepted". The hyped up Bakken thing better last for the good of the entire state because plenty of decent people's chosen ways of life are being sacrificed for the sake of the "American Way".
  9. the great
    Report Abuse
    the great - July 03, 2011 10:19 pm
    I hope someone comes in there and builds some afordable housing that is common sense and not greed. then he an sit there with his 1400.00 hundred one bedrooms empty and stare at them or live in them himselve. That is pure greed and who does he think he is by evicting someone with kids with no where to go. Shame on him and his greed. I wonder how good he feels about himselve with these extra bucks while other people are working hard to make a living and raise their kids, struggling to find a place to rest them selves. His day will come and he may find out that he might be with out some where to lay his head on. there really isnt a one bedroom worth 1400.00 dollars a month. Why dont he try to pay that and see what he has left over after the other expenses of a every day living. greed, greed, greed, shame. i can see raiseing a little rent but thats absurd,
  10. Tim308
    Report Abuse
    Tim308 - July 03, 2011 6:41 pm
    My guess is no apartment/housing developers want to do a lot of development out there for a few reasons.

    First let's face it, ND is a small state, so it's mostly going to be local banks/business people that would do such developments. Even though it's huge economically around here, a few apartment buildings are not going to draw major investors/developers from out of state. Oil companies aren't interested in building/running apartment complexes they're oil companies.

    Second, I've been in a lot of pure mining/oil towns in TX, NV etc. and if you fill an apartment building with those guys, in 10 years it's destroyed, most just don't care about their living space because they work 12 hour days 7 days a week. Those guys can do 30 years of typical renter damage to an apartment complex in 5-10 years. So the return on investment isn't as good, even though the rent is sky high. Most investors don't want to build an apartment complex they know they have to completely remodel from the ground up in 5-10 years.

    Also while I believe oil is going to continue to grow a lot in western ND for at least 5-10 years if not much much longer, many local investors remember the boom and bust of the past, and are probably a bit gun shy of doing major investments for long term housing.

    You also have to remember now everything out there is ridiculously priced. You want to buy land to build an apartment complex (or anything else) it's probably cost prohibitive. There's also probably a shortage of construction workers to do building because they are working in the oil fields for more money.
  11. sixof8
    Report Abuse
    sixof8 - July 03, 2011 5:54 pm
    As a former resident of western ND I am appalled and disgusted at the extreme greed of individuals like these, the focus of this article. C'mon, $800 to $1200 for a one bedroom apartment in Beach or Dickinson? A 3br or a trailer for $2400 in Dickinson? You don't pay that even in most of the largest cities in the US. People need to boycott the bank this individual works for and move their business someplace else. This indidvidual obviously has no compassion for his neighbors, the elderly and his fellow man. I hope he hangs his head everytime he goes to church or out for a cup of coffee. I'm sure he condiders himself a good Christian now doesn't he? Exploiting the elderly and less financial fortunate - sick and disgusting.
    There's a reason greed is considered one of the 7 Cardinal Sins.
  12. tdsnumbers
    Report Abuse
    tdsnumbers - July 03, 2011 4:20 pm
    What has amazed me for the last couple years, and still does, regarding the housing shortage in western ND is that free-market capitalism doesn't seem to be working.... or, having been burned in the late 70s - early 80s oil boom/bust, nobody is willing to do the obvious.

    The obvious is for some contractor or investor to sit down with the various oil companies and negotiate a deal wherein the contractor or investor puts up the capital to build a string of 16-unit apartment buildings if the various oil companies agree to lease X number of units for their employees housing via a long-term lease arrangement so the investor putting up the capital gets a fair return on his/her investment and doesn't get burned if the oil company decides to move its employees to another location.

    The housing situation is only going to get worse and the Bakken oil play is far, far bigger than what we had in the late 70s - early 80s. It's going to be here for a long time..... and it's going to get bigger. I can't believe housing investors haven't moved into western ND and negotiated long-term housing deals with the oil companies.

    The oil companies don't want to build housing because their business is finding and producing oil, not managing rental properties. Also, they don't want to tie up their capital, but this housing shortage is a gold mine waiting to be found for the right investor with enough capital to build the units and negotiate long-term lease deals with the oil industry.

    This kind of thing is done all the time with commercial property throughout the country. I don't know why nobody is willing to try it with residential housing in western ND.
  13. stillhatinnd
    Report Abuse
    stillhatinnd - July 03, 2011 2:20 pm
    Keep in mind that these are the same business people who will by crying when the inevitable bust comes. Complaining that along with the oil companies, the PEOPLE are gone!! These folks will get what's coming to them and they'll deserve no sympathy when there are no "regular" people to keep the businesses going.
  14. In the Know
    Report Abuse
    In the Know - July 03, 2011 2:06 pm
    Another thought...... Did the people who sold these apartment buildings to the banker get huge money for them because of the oil economy? Did they gouge the banker because they knew that he could pay and that the market rate for rents could go up dramatically? This was not addressed. I am sure that these sellers got VERY good money for these properties.

    When the oil boom goes bust, will you feel bad for the banker for potentially paying too much for the properties?
  15. nodakgirl
    Report Abuse
    nodakgirl - July 03, 2011 1:53 pm
    If a person wants to live or travel in western ND, they better be prepared to work for the oil companies. That way you have a place to live or have a motel room to stay in. We were turned away in Dickinson at a motel because we weren't with the oil companies, we were, 'gasp', tourists. And every other hotel we tried was full because they were high priced dormitories for the oil workers. Everyone is jumping on the almight dollar to get what they can.

    But who is going to do the customer service jobs? The lower paying jobs? The people who do them deserve just as much if not more respect as anyone else. Good luck to those of you who are a part of that job sector!! Hope someone out there sees the light for you.
  16. In the Know
    Report Abuse
    In the Know - July 03, 2011 1:23 pm
    Most North Dakotans are Republicans. Why are there so many people (Republicans) so critical of this banker's actions? This is the American way. What do you want to do, have the government regulate this situation? This is pure supply and demand. Obviously he is getting these big rents, so people are willing to pay his price. Why should he let people stay at far less than the going price? Yes, the banker is greedy.....just like Wall Street...just like the oil companies....just like the insurance companies.....just like the health care industry. This is unregulated business; this is what you voted for....remember?

    Oh...one more thing.....You folks are also probably the same folks who are against "Obamacare." Should you have access to health care if you can't afford it? You vote Republican.....now live with it.
  17. stillhatinnd
    Report Abuse
    stillhatinnd - July 03, 2011 12:59 pm
    There's so much that can be said about this guy. Most of it has already been said. The MOST important thing and the only thing that will show just how much the community is against what he's doing is - BOYCOTT his bank. Or if that's too much trouble for the average person to do to show this jack**s that THEY care, maybe they don't care as much as they profess.
    If his bank survives, it'll make everyone who continues to do business with him, and then bit*h behind his back, a hypocrite. Time will tell.
  18. Sounder
    Report Abuse
    Sounder - July 03, 2011 10:45 am
    Come now, let's not everyone pick on "Honest Bill" at the same time. He's providing a service, the bad thing is he doesn't care who this service service hurts - as long as he wins. He has to live in a small town and now that everyone knows about "his service" he may find a lot of extra spots at his table. Unless his buddies are as honest and community oriented as he is. Bill - get a heart, these are people you have to live with and face everyday. Oh wait - I know the owner of Power Fuels, no wonder you guys are such pals.
  19. Holly235
    Report Abuse
    Holly235 - July 03, 2011 10:27 am
    My hubby is a native of Beach, and I claim it as my North Dakota "hometown", as I'm not from here. What Holzwarth did was horrible. The sign "We have the right to refuse service to anyone" certainly applies to him. If this were the "old west" he would be run out of town.
  20. justthinking
    Report Abuse
    justthinking - July 03, 2011 9:33 am
    I agree with other posters - CHANGE BANKS! The money in Holzwarth's pocket is apparently all that he understands. I think anyone who has dealt much with bankers, agree that most are 'of a different mind set'. Of all bankers I have been exposed to, there are a few in Dickinson(and I would love to mention the bank) that are good, compassionate people that do not have the typical "God" mentality that alot of banker's do.
    I agree, too, that the service providers of Beach will have to move to find afforable housing - let's see how Holzwarth likes going to the cafe and making his own food & coffee. Oh yes, and who's going to be putting groceries out on the shelves where his wife wants to buy their groc? Maybe she can?
    Yes, I know there are greedy North Dakotans, but the majority are still honest, upstanding, ethical, compassionate people that makes North Dakota a wonderful place to live.
    It's good to hear that Lutheran Services are building to provide a place to live for those less fortunate. But, that takes time, what do these displaced people do until then? I know this isn't the only 'oil' town where this is happening, but it still doesn't make it right. We expect 'outsiders' to not care or have a heart for the less fortunate people, but Beach's own resident that has coffee with the 'commoners' every morning?
    Remember, Mr. Banker, not everybody has had the opportunities that you have had to put you in the place that you are. Ever think that the good Lord gave you those opportunities in life to make a positive difference in the lives of those less fortunate? I wouldn't want to be in your shoes when the Lord 'rewards'.
    Just a suggestion, Mr. Banker, if you can make so terrific off these oil companies, why didn't you build modest, clean, afforable housing first for the people to go to, so you can make a fortune off the oil company. ????
  21. dr finklestein
    Report Abuse
    dr finklestein - July 03, 2011 5:24 am
    I know this sounds immoral and unjust, but it is what it is, capitalism at its roots. The law of supply and demand. I in no way condone this, in fact as a human being it truly sickens me, but I find it odd that people think that this can't happen in North Dakota. We have placed ourselves on such an imaginary high horse but we find over and over again, as the "boom" takes hold...we are absolutely no different than anyone else. We are not the special, hard working, above the fray moral "city on the hill" that we have led everyone to believe we are. When it comes down to it, like everyone else, we will do what we can, when we can, however we can to serve mamman....the almight dollar. Oh sure, we talk a great game but when the buzzer ticks closer to zero, we show our true colors....the same as all those around us we speak so ill about, those immorals that live in the "big city" or on the coasts. These things just "don't happen here"....UNTIL THEY DO. Then what is our excuse. We can all be appalled but really, it is just the jelousy that this guy was able to take advantage of the "law of supply and demand" and the rest of us just weren't smart enough to do it first. And don't say you wouldn't because I am sure he thought he wouldn't either...til the opportunity was there to do so. Awe, the godfearing NoDakers and there hypocriticall high standards.
  22. nhwca
    Report Abuse
    nhwca - July 03, 2011 2:30 am
    what?! that much for a small one bedroom...in nodak?? it doesnt even cost that much for a 1 bedroom in LA. shady.
  23. Tim308
    Report Abuse
    Tim308 - July 02, 2011 9:56 pm
    That's what happens when big oil comes in. Everyone wants some of the money, ethics, morals, and honor go out the window. Charging $1200-1400 for an apartment in Dickinson, ND..... so much for ND being a cheap place to live where people are friendly and look out for each other and their community.

    How is anyone working for less than $10-15/hr going to afford to live in these cities? You have to make $9/hr AFTER taxes just to pay for a $1400 a month apartment. That's assuming you don't need to eat food, buy gas, pay insurance etc. Next thing you know these towns can't get any good people to work at these everyday jobs, in stores, restaurants, gas stations etc. because there's no housing they can afford. After a few years most of the good honest moral people will have left and they will just be the typical mining/oil towns.

    Is it illegal, not at all, but a lot of people live in ND because they wanted to live with good people that cared more about community and doing the right thing than just making as much money as they could.
  24. thejack
    Report Abuse
    thejack - July 02, 2011 9:39 pm
    whatsnottaken is right... If you disagree with the business practices of Holzwarth you should switch banks. He may then get the message of how to run a business in a small town. What he did was legal... but it really pushes some business ethics boundaries. Especially in a small town with limited options.
  25. Believe
    Report Abuse
    Believe - July 02, 2011 9:17 pm
    I wouldn't want to be Bill Holesworthless; greed will kill you! What you do to others will be done to you; seven times as severe.
  26. whatsnottaken
    Report Abuse
    whatsnottaken - July 02, 2011 8:45 pm
    Yea, I wanna have coffee with (Dollar) Bill Holzwarth. Sounds like a great guy. Change banks y'all
Add Comment
You must Login to comment.

Click here to get an account it's free and quick