Bakken Bunkhouses: Tale of Three Cities


Boom and bust; so goes the cartel capitalist cycle. But what to do when all of the man-camps start to dry up as the world saturates with the cheap oil of stagnant economies and petro-politics, leaving the expensive fracked fields of eastern Montana and North Dakota bleeding in the red?

Much of that temporary housing hauled in for the insta-cities and meth-fueled dens of oil workers is now being repurposed. And at least three cities in Montana are taking advantage of this unused housing. Missoula, Butte and Bozeman have purchased some of these units, but how they are being transformed into local housing speaks volumes about these towns. Their approaches differ radically for affordability issues, and associated homeless populations, the working and homeless poor, addicts leaving treatment looking for places to solidify their recovery, and convicts moving out of prison and back into communities.

Let’s start off with Butte. Some of you may know that the Butte Rescue Mission was forced to close in April due to code violations in the building they had used. So they purchased some of the surplus Bakken housing located in Watford City, North Dakota.

They acquired 11 units, each 720 square feet, and created a design with two pods — one with five units, the other with six, and where 56 people could live (more in the winter) and facilities like a commercial kitchens, dining area, restrooms/showers, and a children’s play area could be shared. There is room for offices for needed professional staff like case workers, counselors and mental health professionals.

Then they went on the hunt for land, and found 6.6 acres on Butte’s south side, where they are seeking a variance to assemble their new Rescue Mission. If all goes well, they hope to be up and running in October, a scant 6 months after losing their last facility.

And what is all of this going to cost the Butte rescue Mission? Well, they purchased the housing for $71,000 (that’s not a typo), and the money came from a donor. A quick look on realtor sites locates 23 acres for $385,000 about where the Mission said it is purchasing the land. Assuming they are taking 1/4 of this lot or similar land close by we can assume the price is around $100,000.

Mission Director Rocky Lyons said that they are looking for donors to help with the land purchase, and to move the units and set them up. I guess we can assume that Butte’s new Rescue Mission will cost next to nothing to the nonprofit, and house 56 people by October, given that all goes well.

That’s a pretty awesome deal, generating housing for 56 people on a shoestring budget of good will and donations, and the Rescue Mission should be applauded!

Let’s move on to Bozeman. HRDC, the nonprofit agency that is spearheading this housing effort, is thinking big. They purchased 75 of the new “cottages”  from Sidney MT through a broker. This is in addition to a proposed program to funnel a fixed percent of development costs in the city to a fund to subsidize land purchases and affordable housing, similar to that in Bend Oregon.

HRDC has gone to the trouble to quantify what each chronically homeless person in their community costs:

In fact, [the report] says, each chronically homeless resident costs Bozeman-area institutions, supported by taxpayers and charitable donors, a whopping $28,000 a year — more than twice the cost of providing shelter through the nonprofit’s rehousing program…

At the moment, HRDC is working with the Montana State University School of Architecture and St. James Episcopal Church to develop what they’re calling a “Housing First Village” — a cluster of comparatively cheap, tiny homes that could be an ideal setup for giving folks a path out of homelessness.

A “Housing First Village! Very enlightened idea, building tiny homes for less than $10k each. So how is Bozeman going to integrate Bakken housing into their vision? Good question. The costs and final plan haven’t been revealed yet. But Missoula also bought 10 of the same units as HRDC, and Heather McMilin, Homeword’s (Missoula) housing development director had this to say:

“We got them for what you would normally pay for the studs and the wires,” she said. “We got the units at a low enough cost that we can go in and work on landscaping and awnings and clustering and all that. It will be fun.”

So, they were cheap. The Indy priced them out at $35k each. Bozeman, which appears to have a good grasp on the needs of housing in its community, and the costs of homelessness, went all out spending several million dollars on a one-time great deal. Missoula bought 10 and just wants to have “fun” with its new units.

So what is Missoula going to do? Well, first off, 10 units is a drop in the bucket of Missoula’s housing crisis. And Missoula has a 10 year plan to address the issue. Here’s a story from the Kaimin earlier this year:

Now five years into the 10-year endeavor, Reaching Home coordinator Theresa Williams said the plan has shown no measurable effect on the homeless population.

So, Missoula’s Reaching Home program has had no success, yet Homeword wants to have “fun” with its 10 Bakken housing units. Sweet… And homelessness affects .75% of Missoula’s residents — somewhere around 1,000 people.

So let’s dig a little deeper into what is going to happen to the Bakken units. Here’s a snip from the same Indy article:

Homeword has identified a lot adjacent to the new Missoula Food Bank suitable for placing six of the units on permanent foundations in a “clustered” configuration.

Most important, [Homeword’s Andrea] Davis says, the project looks like it will make good on the structure’s initial promise as a good deal. Missoula residents need an annual income of $63,000 to afford a median-priced home in the city, but Homeword will use the federal HOME money to reserve five of the first six units for individuals earning only about half that much. After purchasing land, installing the units and sprucing them up, Davis says, Homeword should be able to sell them for $100,000 or less by the end of next year…

And with some resourceful touches, these little houses shouldn’t look like fire sales.

“There’s just an opportunity to make these cute,” Davis says.

So Missoula’s effort, having already spent $350k for the units, got a grant for $270k to renovate the new units, and prettify them with landscape and dolled up exteriors with awnings and color coordinate trim, plans to sell them for $100k each, or about a million bucks total. Which leaves a nice half million dollars of “profit” to the nonprofit.

I assume that those that can qualify for a $100k loan (about $30k per year according to Davis) to purchase one of these units are not homeless. After all, how can you apply for a loan when you neither have a physical address (“under the Reserve Street Bridge” don’t cut it), a job (flying a sign on a street corner or panhandling won’t work), a phone, or any sort of financial history? Of course you can’t.

But Missoula’s newest housing effort is going to have “fun” with its 10 “cute” Bakken units. And it’s going to place them next to the Food Bank:

“It would be an ideal location for people of limited needs, should they need the services of the Missoula Food Bank,” says Andrea Davis.

Can it get any more condescending than that?

Kudos to Butte for making home for at least 56 people by this fall and Bozeman for thinking big, and outside the box with tiny homes, developer fees, and Village concept (not to mention what the final plan will be for 50-75 of the Bakken units)! It’s back to the drawing board for Missoula with its pathetic nonexistent efforts to provide housing to people in desperate need of a new start in life, or for the working poor who are living out of their cars hoping that some day something will open up.

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3 Responses to Bakken Bunkhouses: Tale of Three Cities

  1. Great post, JC. Thank you!

  2. Steve W says:

    I thought that was a good post. as well.

    I also saw this as well.

    While not as cheap as the portable modular housing it is at least quite a few units.

    • JC says:

      This is a deceptive article. While it is meant to show that progress is being made on affordable housing, it really is just preserving the status quo. The units were already rent-capped for the next 9 years.

      What is really problematic about this, and the title of the article brings it up — “Unique method used to buy low-income apartment complex” — is that nowhere in the article does the “conduit financing” get described. Leave it to the Missoulian to forget the details to support the headline.

      According to Missoula Current:

      “The property’s 160 units were built in 1996 using tax-exempt bonds and housing credits.”

      So, we subsidized the project once, and now we’re going to subsidize it again. Missoula Current goes into more details about the conduit financing:

      [HomeWord E.D. Andrea] Davis placed the purchase at more than $12 million, though it equates to just $85,000 per unit.

      “When you look at a per-unit cost, there’s no way you can compete with that with new construction,” Davis said. “We couldn’t pull together the financing to build 160 units today.”

      Homeword has asked the city to approve a tax-exempt conduit bond with Homeword as the borrower. First Security Bank has agreed to purchase the bond.

      “There’s no risk to the taxpayer, because it’s not a general obligation bond,” Davis said. “We had to get aggressive with our timeline and offer. There’s a lot of money out there looking for real estate right now.”

      I wonder what the initial subsidies cost Missoula taxpayer? And if the city is willing to subsidize HomeWord’s low-income housing efforts, might we talk about to what other uses a $12 million dollar bond might get put, like providing homes for a thousand houseless people now living on the streets?

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