Natural gas drilling impacting affordable housing
Before the natural gas exploration boom, homelessness was unimaginable in rural Pennsylvania, where quiet streets had an excess of housing. While much of the stock was older - large Victorians converted to multi-units or working -class homes - finding a place to live was affordable.
Today, housing is not just expensive. For many, it is unaffordable.
Judy Smith is the soft-spoken volunteer coordinator of Grace Connection, a charity begun by a group of Towanda-area churches. For many years, the charity operated a clothing and food bank, and helped people in crisis who needed vouchers for gas, food, or even to maintain utility services.
With the advent of Marcellus Shale exploration, the social problems have gotten more severe, Smith said.
Grace Connection typically would assist families displaced by fire or some other event and put them in a hotel. Now, she's seeing more people forced out of their apartments and onto to the streets, unable to pay doubling or tripling rents.
"Some of these people have lived here all their lives, worked the same job for the same pay," she said. "They can't be expected to suddenly pay double or triple the rent."
Smith, like everyone at Grace Connection, is a volunteer. In a windowless office with little more than a filing cabinet, fax machine, and desk, she boasts the only Grace Connection expense is the phone bill.
The housing problem has taken an emotional toll, she said, particularly last winter.
With hotels fulls of gas workers, she couldn't even place people temporarily. Some displaced renters spent the night under Memorial Bridge, or along the river in tents. "I would come home to a bed and heat and a roof over my head while people were sleeping outside and in doorways" she said. "You try to distance yourself, but in some cases you can't."
Some have had no other choice but to move. One couple told Smith they were going south, to be homeless where it was warm. Other have opted to move to other communities, including Scranton.
Elderly couples that showed up at the St. Anthony's Haven, a Diocese of Scranton homeless shelter in January and February, stood out from the usual population.
"It's not that we don't accept couples or elderly people, of course, it's just that we don't see many of them there," said Monsignor Joseph Kelly, Diocesan Executive Director Catholic Social Services. "We couldn't understand why they were homeless."
In one case the lease was up on couple's half-double in Towanda, a place they had rented for years. Rent would increase from $400 to $1,000, Kelly said.
"I suspect we are getting much more people, we just don't have any way of knowing when someone shows up," he said. "Landlords are finding a greater opportunity having three shifts of gas workers in a place."
With no hotel space and people having to leave homes, Grace Connection began to think of bigger solutions and came up with Grace House, a multi-unit building, offered by a generous owner, to be operated by Grace Connection to offer fully furnished transitional housing for the temporarily homeless. For an organization used to offering vouchers, Grace House would be a major step offering a concrete service.
The project ran afoul of code requirements, however, said Jira Albers, pastor of Trinity Evangelical Lutheran Church in Towanda and president of Grace Connection. Inspectors classified the building as a boarding house and state requirements mandate a sprinkler system. That expense was out of the question. Albers asked if Grace Connection served just one family at a time in the house, if they would be compliant. The answer was "no." The only option for housing the poor was new construction. For Grace Connection, with an annual budget of less than $60,000, that was out of the question.
"Isn't it better to have people inside, even without a sprinkler system, rather than sleeping under the Memorial Bridge or on picnic tables?" Smith asked. Kelly is confident that some help is on the way. The Pennsylvania Housing Finance Agency has made it a priority to address affordable housing in the region. The agency recently made a grant to Montrose-based nonprofit Trehab to build 40 low-income housing units, the Meadows at Tiffany Pines.
It will add to another Trehab property, the Golden Eagle Hotel, where spacious two-bedroom units lease for $407 per month. The building was gutted and renovated in 2007 at a cost of $1.2 million by Trehab.
Things will get better, said Trehab executive director Dennis Phelps.
"This is a classic housing crunch," he said. "It can take five to seven years to normalize."
Kim Skumanick, a real estate agent with Lewith & Freeman Real Estate in Tunkhannock, said the rental prices are a simple matter of supply and demand. The solution - more housing - is slow in coming, she said. Apartment conversions, while they are happening, won't be enough. New rental housing is slow in coming because investors aren't convinced that the boom will be followed by a sustained demand that will allow them to recoup their investment.
"If you look at other areas that have seen the gas industry, housing demand is greatest during initial development," Skumanick said.
Mike Getz, of Towanda, is a long-time property owner who owns 13 units and a shopping center. He's never kicked out a long-term tenant or dramatically increased the rent. But when tenants paying $700 for a two-bedroom moved out, Getz made some improvements and put it back on the market for $2,150 per month, utilities included. He said he's justified in charging the rent. Before the shale rush, the rental market was depressed, he said, with units running $200 or $300 below other areas. He estimates his impeccable two-bedroom on York Avenue could have netted $1,200 per month before Marcellus Shale. With a blossomed industry, he's comfortable asking more than $2,000.
"I know people have been priced out of the market and are living somewhere else - but they are still living," he said. "This is no different than what happened to people in the Poconos 20 years ago when people from New York and New Jersey moved in."
Not exactly, said Davis Chant, a long time real estate agent in the Poconos.
For one, the influx into the Poconos was gradual, over the course of several years as opposed to tens of thousands of workers flooding the sparsely populated Northern Tier over a few months. Also, the migration to the Poconos from metro New York was of permanent residents rather than itinerant workers.
"In the 1980s and 1990s, people could buy a lot in the Poconos for an affordable price and build an affordable house - no one was getting forced out," he said. "It's going to be a challenging two to three years in the Northern Tier until wells are completed and the dust settles."
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