ENID — Enid housing is stuck.
Demand is through the roof, but almost no builders are building.
“It was sort of a perfect storm,” said developer-builder David Ritchie, one of the few left standing after the double whammy of the 2007-2009 national housing crash and March 2011 announcement of Continental Resources' pending move from downtown Enid to downtown Oklahoma City.
Continental didn't move until 2012, but the announcement alone was enough to send builders into retreat.
“With the national economy the way it was, and Continental's announcement, the perception of a lot of people in the Enid area was that we were really heading into a downturn. The exact opposite actually happened,” Ritchie said. “A lot of the homes of the people at Continental sold and were absorbed into the market.
“But the new housing construction market, because of the perception that was out there, just dried up. It has stayed that way. ... And now what's happening is the demand has kicked up substantially, and the other side of the equation hasn't. So we've got tremendous demand and we don't have anybody right now that's filling it, as far as the building market for new homes.
When homebuilding hit the wall — or rather, quit erecting walls — it got Enid's growing businesses' attention, said Lisa Powell, associate director of the Enid Regional Development Alliance.
Powell said employers were finding it difficult to get and keep employees. Employers from energy-related companies in the booming Mississippian oil and gas play to the northwest, Koch Industries with its growing nitrogen plant and $1 billion plans for a urea plant and expansion, to long-established employers like Advance Pierre Foods, to the city's two hospitals, to its public school system.
So the alliance commissioned a housing study to quantify what everybody here knew: Enid has a housing shortage.
“The limitations on housing, rental housing, all types of housing in Enid, were limiting our businesses in their growth, because they could recruit the employees here but then they couldn't find a place to live,” Powell said.
The alliance contracted with Houston-based CDS Market Research to come up with hard figures.
Powell said the intent was “to quantify statistically, why do we have a shortage? Specifically, what is that shortage? What price range is that in? How many houses can we support? How many apartments do we need? So we can take that information and shake the market loose a little bit and recruit some builders and developers and people who want to invest in housing here.”
The bottom line? Some 330 new single-family houses would be absorbed, and between 300 and 400 rental units would be filled over the next 12 to 24 months — if they were to be built.
Developer Gene Anderson is doing his part to answer the need with a long-term mixed-use project called Stonebridge Village. Anderson called the project, which encountered but worked through opposition from some neighbors, “a complete village combined with residential, multifamily, commercial” with a park and lake.
Anderson said it will be patterned after Villas at Stonebridge in Edmond, with 120 single-family houses, about 200 upscale apartments in a “live-work-play” environment, a concept that is a “proven success” in other growing markets.
Powell said the study determined something else even more important for the long term.
“The real finding from the study was that the growth that we're experiencing in Enid is not temporary. It is not the boom-and-bust cycle of the oil-and-gas industry. It is permanent. It's real. It's from all our legacy companies growing, and it's here to stay. That's the good news. We hope that will give comfort to those who are interested in developing here. It's here to stay.”
Another energy bust would hurt, of course, but the oil and gas business is a small percentage of Enid's economy, said Aaron Brownlee, president and chief operating officer of Enid-based Wymer Brownlee, a financial, tax and investment services firm with offices in Oklahoma City, Tulsa, Bartlesville and Fairview.
Jobs not enough
Brownlee is more than an observer of Enid families' finances, he's also an employer, who has found it hard to recruit workers for lack of housing. He said he hired a woman who moved here from Tulsa — a tall woman with a 6-foot-6-inch husband — and the only place they could find was a small apartment outfitted for a handicapped person: extra low counters and furniture.
“You can put together as good a working environment as you can, in a city with the best quality of life,” but with no or little housing choice, it's not always enough, he said.
Brownlee's work also gives him another insight into Enid-area housing: The energy boom has created a lot of wealth for a lot of royalty owners — and most of it's sitting in low-interest-bearing accounts. Some of it could be invested in housing, he noted.
However, the study also found another obstacle to the market meeting demand, even if there were more builders: It cost more to build a house in Enid compared with, say, Oklahoma City (90 miles to the south), Tulsa (115 miles to the east) or Wichita, Kan. (125 miles to the northeast).
“Enid jobs are not significantly adjusted to take this into account. Plus, the expectations that potential Enid-area homebuyers have for new homes do not appear to be aligned to realistic pricing,” the study found. “The employee survey showed that those who might consider buying a home expect generally to pay between $500 and $1,000 monthly for their housing cost.
“Even at today's very low mortgage rates, this generally equates to homes priced well under $150,000, assuming the buyer is not contributing a high level of equity. Builders and developers report that it is difficult or impossible to build new single-family homes in this price range that meet the quality and size expectations of buyers.”
Researchers also found some factors at work in the Enid economy that would seem unusual — if not for the harsh reality of the 1980s regional energy and real estate crash and memories of it.
The study found “an existential concern, or even outright fear, about the potential for untimely reversal of the local economy leaving those who invest in housing suffering dire financial consequences; this is coupled with a general sense that the financial community does not understand the dynamics of the local market,” and, “a lack of leadership within the community to make housing development an economic development priority.”
Powell said the city, Realtors, and Enid Economic Development Alliance are working on the “fear” and “lack of leadership” part, using the study itself as a rallying point.
Meanwhile, Ritchie said some things that changed in housing here with the Continental scare can't be changed: Some builders quit for good, and a few closed. Some things are being slow to change: Lenders are reluctant to lend to startup builders.
New builders needed
What's the answer?
“God, I wish I knew. I'm doing as much as I think I can right now,” said Ritchie, who is a director and former president of the Oklahoma State Home Builders Association. “We need to attract some new builders.”
Tuttle-based Richardson Homes recently opened an Enid office, but Richardson builds custom home for people who already own land — and Enid needs spec builders, Ritchie said.
“It'd be nice if we could attract builders that would be willing to build spec houses. Production builders? I've talked to some of the production builders out of Oklahoma City. There's not a lot of interest in them coming up here. I can't tell you why,” Ritchie said. “We've got production builders that are operating in Stillwater but can't come to Enid and operate.
“They're very busy. They're busy in Oklahoma City. They're busy in Stillwater. They're busy in Mustang. They're busy in Yukon. And this may be just one step too far for them.”