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Six-Figure Oil Patch Positions Are Causing Housing Shortages

As the oil boom has caused a large sum of revenue for oil companies, the need for more workers in the oil patches has increased as well. Ultimately, these jobs are being filled by construction workers, many of whom used to work as carpenters, plumbers, painters, masons and other type of prevalent workers within the housing industry. As these workers found a new line of employment, the housing industry began to slow down, leaving oil rich towns in North Dakota, Texas, and Colorado facing a shortage of homes.

Six-Figure Wages

The reason why oil patches are attracting an overwhelming amount of the skilled labor in the area is due to their tantalizing salaries, which tend to start in the six-figure range, many of which also include bonus structures. “Even when a new construction worker is hired for a job, it's often not be long before he's poached by an oil company,” said the owner of The MacDonald Companies, a home builder in Kerrville, Texas.

Related Article: The Texas Connection

Production Has Slowed

The overall lack of labor in the housing industry has effectively changed the way the housing market has been functioning in both efficiency and economy. For starters, a house that used to take 1 year to build is now taking18 to 20 months. A large reason for the slowdown has to do with the fact that as foreman lose their crew to the oil companies, they are forced to rehire and retrain new personnel on the job. This ends up costing the developers more money, cutting into profits and might result in an increase in the sale price of the home.

Cost of Living Has Risen

The oil patches have also had an effect on the cost of living within these towns and the surrounding areas. In fact, a 1,150 sq. ft. apartment will run you approximately $3,200 per month. That's about 3 to 4 times the rate charged by landlords outside the state's oil patch. Companies have been attempting to bring in workers from outside areas to help build and develop multi-family and single-family homes. Unfortunately, there aren’t enough residences available to live in. Therefore, many people have resorted to living in campers, or their car while they continue to work for their hefty paycheck.

Related Article: 5 Great Cities for Millennials to Buy a Home

Cutting Costs and Keeping Labor

Marc Towne is a builder in Colorado Springs as well as Fort Collins, CO. Marc has found ways to decrease his expenses and still maintain a certain level of quality to his work. By doing things like buying pre-cut lumber and fitted molds, he is able to get less skilled labor to work on his projects and still lower his costs. He’s also finding ways to time his projects out according to workflow, that way he can keep his crew busy and will be less likely to lose a man in between jobs.

One source of labor has been coming from immigrant workers, who may not have the proper licenses or paperwork to work for the oil patches. However, many builders fear that the recent findings of oil in the Gulf of Mexico will drive a lot of workers out of the country and threaten the production of new housing developments even further. An indicator that this might occur is the Mexican government recently allowing for private and foreign investment into its oil and gas reserves. The only hope appears to be if the price of oil drops rather significantly, and fast. What appears to be a highly unlikely scenario any time in the near future.

 

Would you quit your day job for a six-figure salary at the oil patch? Do you think immigrant laborers will flock to Mexico in order to find work at the oil patches in their native lands? Let us know what you think of this story by leaving a comment below.



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