OUR OPINION: Housing supply growth is reassuring
“No vacancy.” That was the greeting western North Dakota delivered to visitors in 2010 and 2011.
As anyone who tried to stay overnight during those years would agree, the Bakken region was critically short of hotel rooms, pushing some tourists as well as longer-term visitors to sleep in their cars.
But then, something happened: A construction boom in hotels began.
As a result, the supply-and-demand of hotel rooms seems to have equalized, and complaints about “No vacancy” signs are much further and farther between.
That’s the free market at work.
Over time, will the same forces ease the shortage of permanent housing in Grand Forks?
Actually, they’re already starting to do so.
That fact, plus the city’s mixed-to-poor experience with more actively interfering in the housing market in years past, suggests Grand Forks is striking the right balance and should refrain from taking steps such as buying land.
“For the third year in a row, North Dakota has developed new housing at a faster rate than any other state in the nation,” a press release from Gov. Jack Dalrymple’s office noted last week.
“North Dakota added 10,207 new housing units last year, the nation’s strongest growth rate at just over 3 percent.” That was 10 times greater than the national average of 0.3 percent, the press release declared.
And while the housing growth is centered on the Oil Patch, Grand Forks County enjoyed a 1.4 percent housing-growth rate. That’s below the state average but well above the national pace.
The number of construction projects around town add to the sense that housing construction is robust. And very importantly, the new homes being added are selling for market rates — not below-market rates, which is what would happen if City Hall got into the business of selling homes or land at a discount.
Owners of existing homes often object to such plans, which can drive down property values by “flooding the market” with less-expensive properties.
Grand Forks City Council member Dana Sande is right, in other words: Grand Forks’ housing supply gradually is growing to meet demand. And as long as that’s happening the way the economics textbooks predict, there’s little reason for City Hall to “improve” things by actively intervening.