Metropolitan School District of Decatur Township

Transcription

GOOD AFTERNOON, EVERYONE. IT'S GREAT TO SEE ALL OF YOU HERE TODAY. THANK YOU FOR JOINING US. MY NAME IS JANE LYNN POWELL, THE GENERAL DEPUTY SECRETARY FOR THE OFFICE OF POLICY DEVELOPMENT AND RESEARCH. AND WELCOME TO OUR QUARTERLY HOUSING MARKET UPDATE. AND WE'RE DELIGHTED TO SEE ALL OF YOU HERE. HEADQUARTERS STAFF, AS WELL AS THOSE WHO ARE VIEWING ON THE WEBCAST. AS YOU KNOW, PD & R BRIEFS STAFF ON QUARTERLY, NATIONAL, AND LOCAL HOUSING MARKET CONDITIONS AND WE ALSO HAVE A TOPICAL PIECE IN THE FORM OF A PANEL DISCUSSION ON CURRENT RESEARCH. TODAY'S BRIEFING WILL INCLUDE AN UPDATE OF THE THIRD QUARTER NATIONAL AND LOCAL HOUSING MARKET CONDITIONS, AND IS PRESENTED BY OUR SENIOR MARKET ECONOMIST, CHIEF MARKET ECONOMIST, KEVIN KANE, AND WE HAVE A PANEL DISCUSSION THAT'S TITLE BOOM TOWN EFFECTS OF NEW OIL AND GAS EXPLORATION ON LOCAL HOUSING MARKETS, AND WE'RE VERY PLEASED TO HAVE OUR FIELD ECONOMIST, AND REGIONAL ADMINISTRATORS, AND I UNDERSTAND WE ALSO HAVE A FIELD OFFICE DIRECTOR THAT WILL BE CALLING IN TO PROVIDE A PRESENTATION ON SIGNIFICANT GROWTH CONDITIONS THAT ARE HAPPENING IN THESE COMMUNITIES THAT ARE 7 EXPERIENCING OIL AND GAS EXPLORATION. AND WE'LL ALSO HEAR FROM THE FIELD LEADERSHIP IN TERMS OF HOW THESE COMMUNITIES ARE ADDRESSING AND RESPONDING TO THESE CONDITIONS. KURT YASOWSKY, DEPUTY SECRETARY FOR THE OFFICE OF ECONOMIC AFFAIRS WILL BE MODERATING THE PANEL AND WILL ALSO BE FIELDING THE Q & A PORTION OF THE PANEL. YOU CAN VIEW THIS WEBCAST, IT'S GOING TO BE ARCHIVED ON OUR HUD.GOV, AS WELL AS OUR HUD USER.ORG WEBSITES, AND YOU CAN FOLLOW US ON TWITTER, HASHTAG PD & R UPDATE, AND IF YOU HAVE QUESTIONS, PLEASE, E-MAIL THEM TO PDR QUARTERLY UPDATE AT HUD.GOV. AND SO WITH THAT, I'D LIKE TO INTRODUCE KEVIN KANE, AND HE'S GOING TO MAKE HIS PRESENTATION ON THE HOUSING MARKET CONDITIONS. >> >> GOOD AFTERNOON EVERYONE. BEFORE I BEGIN AS ALWAYS I'D LIKE TO THANK RANDALL GOODNIGHT, ONE OF THE FIELD ECONOMISTS IN THE OKLAHOMA CITY OFFICE WHO HELPED PUT TOGETHER ALL THE MAPS YOU'LL SEE IN MY PRESENTATION THIS AFTERNOON. JUST A NOTE ABOUT THE MAPS, THE COLOR THEMES ARE ALL THE SAME, WHERE BROWN INDICATES WORSE OFF CONDITIONS OR DECLINES IN THE VARIABLE, AND BLUE INDICATES BETTER CONDITIONS OR INCREASES. BEFORE WE LOOK AT THE HOUSING MARKET, LET'S TAKE A LOOK AT THE NATION'S ECONOMY. THIS FIRST FIGURE, ONCE WE GET IT UP HERE, SHOWS THE YEAR OVER YEAR PERCENTAGE 8 CHANGE, AND A LITTLE TECHNICAL DIFFICULTIES BUT SHOWS THE YEAR OVER YEAR CHANGE IN NONFARM PAYROLLS SINCE 2002. WE LOOK AT BOTH THE 12 MONTH AND THREE-MONTH AVERAGES THROUGH SEPTEMBER OF 2012. MOVING FORWARD, THERE SHOULD BE A BLACK LINE COMING, WHICH SHOWS THE 12 MONTH YEAR OVER YEAR CHANGE AND RED LINE WHICH SHOWS THE THREE-MONTH YEAR OVER YEAR CHANGE, AND THERE WE GO. NONFARM PAYROLLS ARE A MEASURE OF JOBS IN THE ECONOMY, THE 12 MONTH AVERAGE IN BLACK SHOWS AN ANNUAL CHANGE, AND IS A MORE STABLE MEASURE OF ECONOMIC PERFORMANCE. THE THREE-MONTH AVERAGE CHANGE IS A GOOD INDICATOR FOR WHERE THINGS ARE HEADING. DURING THE 12 MONTHS ENDING SEPTEMBER 2012, NONFARM PAYROLLS AVERAGED NEARLY 132.8 MILLION JOBS. THIS WAS UP 1.4%, OR 1.8 MILLION JOBS FROM A YEAR AGO. AND THE THREE-MONTH AVERAGE WAS ALSO UP 1.4% FROM A YEAR AGO. NEXT SLIDE HERE, FOR THE SIX CONSECUTIVE QUARTER, EVERY REGION IN THE COUNTRY ADDED JOBS RELATIVE TO A YEAR AGO. YOU CAN SEE THAT THE ENTIRE COUNTRY WAS IN BLUE. THE WESTERN HALF OF THE COUNTRY GREW FASTER THAN THE NATIONAL AVERAGE, WITH GROWTH LED BY THE SOUTHWEST AND THE PACIFIC, AT 2 PERCENT EACH. THE SIX REGIONS IN LIGHT BLUE GREW AT A RATE THAT WAS SLOWER THAN THE NATIONAL AVERAGE, WITH THE SLOWEST 9 GROWTH IN THE GREAT PLAINS, AT .7%. IN THE NEXT SLIDE COMING, THE NORTHWEST REGION GREW BY 1.5% DURING THE THREE MONTHS ENDING SEPTEMBER, AND THIS MAP SHOWS THE GROWTH AT THE METROPOLITAN AREA LEVEL IN THE NORTHWEST REGION, THOSE AREAS THAT WERE IN THE DARKEST BLUE GREW BY MORE THAN THE NATIONAL AVERAGE, WITH FIVE AREAS HAVING GROWTH RATES ABOVE 3 PERCENT, AND THAT WAS LED BY BELLINGHAM, WASHINGTON, AT 3.6%, AND SEATTLE, WITH 3.2%. THE LIGHT BLUE AREAS ADDED JOBS AT A RATE THAT WAS BELOW THE NATIONAL AVERAGE, JOBS DECLINED IN FOUR AREAS, SHOWN IN THE BROWN DOTS, LED BY A 2.2% DROP IN RICHLAND, WASHINGTON. ON THE NEXT MAP, THE NATIONAL UNEMPLOYMENT RATE WAS 8.1% DURING THE THIRD QUARTER 2012. THIS WAS DOWN FROM 9.1% A YEAR AGO. THE SEVEN REGIONS IN BLUE HAD A RATE THAT WAS LOWER THAN THE NATIONAL RATE, LED BY THE GREAT PLAINS AT 5.9%, THE THREE REGIONS IN BROWN HAD A RATE THAT WAS HIGHER THAN THE NATIONAL AVERAGE, LED BY THE PACIFIC AT 10 PERCENT. AND ON A STATE LEVEL, NORTH DAKOTA STILL HAS THE LOWEST RATE IN THE NATION, AT 2.7%, FOLLOWED BY NEBRASKA, AT 3.8%, AND NEVADA WHAT'S THE HIGHEST RATE IN THE COUNTRY AT 11.9%. IN THE NEXT MAP, WE SEE THE CHANGE IN THE UNEMPLOYMENT RATE FROM A YEAR AGO, AND ON A NATIONAL LEVEL, THE UNEMPLOYMENT RATE DURING THE 10 THIRD QUARTER OF 2012 WAS DOWN 1 PERCENT FROM A YEAR AGO, AND THE FIVE REGIONS IN DARK BLUE DECLINED AT A RATE THAT WAS GREATER THAN THE NATIONAL DECLINE. THE LARGEST DECLINE OCCURRED IN THE PACIFIC, WHICH WAS DOWN 1.6 PERCENTAGE POINTS, WITH THE RATE FALLING FROM 11.6%, TO 10 PERCENT, AND THAT WAS LED BY A DECLINE OF 1.9 PERCENTAGE POINTS IN NEVADA AND 1.6 PERCENTAGE POINTS IN CALIFORNIA. THE RATE DECLINED IN EVERY REGION OF THE COUNTRY EXCEPT FOR NEW YORK, NEW JERSEY, WHERE IT WAS UP BY FOUR PERCENTAGE POINTS. IN THE NEXT SLIDE, WE'RE GOING TO LOOK AT AN OVERVIEW OF CURRENT HOUSING MARKET CONDITIONS. SALES CONDITIONS REMAIN SOFT IN MUCH OF THE COUNTRY, BUT THEY CONTINUE TO IMPROVE. AND JUST FOR A LITTLE BIT OF BACKGROUND, BALANCED CONDITIONS EXIST WHEN THE QUANTITY OF HOUSING SUPPLY EQUALS THE QUANTITY DEMANDED, SOFT MARKETERS OCCUR WHEN THE HOUSE SUPPLY EXCEEDS DEMANDED AND WE HAVE A SUS PLUS AND DEMAND OCCURS WHEN THE NEED EXCEEDS SUPPLY. >> ALL SHOWS THAT THE PRICES INCREASED DURING THE THIRD QUARTER 2012 RELATIVE TO THE THIRD QUARTER 2011. EXISTING HOME SALES INCREASED BY MORE THAN 5 PERCENT DURING THE 12 MONTHS ENDING SEPTEMBER 2012. INVENTORIES OF NEW HOMES FOR SALE WERE DOWN 11 PERCENT FROM A YEAR AGO, AND THEY WERE DOWN 21 PERCENT FOR EXISTING HOMES. 11 AND BASED ON THE CURRENT RATE OF HOME SALES, THERE'S A 4.6 MONTH SUPPLY OF NEW HOMES AND THAT COMPARES WITH A 6 1/2 MONTH SUPPLY A YEAR AGO. AND THERE'S A 6.1 MONTH SUPPLY OF EXISTING HOMES, AND THIS IS DOWN FROM AN 8 1/2 MONTH SUPPLY A YEAR AGO. THE SALES VACANCY RATE WAS 1.9% IN THE THIRD QUARTER OF 2012. THAT'S DOWN FROM 2.4% A YEAR AGO. RENTAL MARKET CONDITIONS ARE BALANCED TO TIGHT THROUGHOUT THE COUNTRY, THEY CONTINUE TO TIGHTEN. AN ESTIMATED 67 PERCENT OF NEW APARTMENTS THAT WERE COMPLETED DURING THE SECOND QUARTER OF 2012 WERE ABSORBED WITHIN THREE MONTHS. THIS COMPARES WITH A RATE OF 51 PERCENT, RATE OF ABSORPTION A YEAR AGO, MULTI FAMILY INCREASED BY 52 PERCENT DURING THE THIRD QUARTER 2012, RELATIVE TO A YEAR AGO. AND IN THE NEXT SLIDE HERE, WE'RE GOING TO LOOK AT REGIONAL CONDITIONS ACROSS THE COUNTRY. THESE ARE ASSESSMENTS THAT ARE PROVIDED BY OUR REGIONAL ECONOMISTS. IMPROVEMENTS IN AN AREA ARE SHADED IN BLUE. AND DECLINES IN CONDITIONS ARE SHADED IN BROWN. SALES MARKET CONDITIONS AROUND THE COUNTRY CONTINUE TO IMPROVE, ALTHOUGH THEY REMAIN SOFT IN MOST AREAS. IN NEW ENGLAND AND ROCKY MOUNTAINS, CONDITIONS WENT FROM SOFT TO SLIGHTLY SOFT, AND WE'RE SEEING IMPROVEMENTS THROUGHOUT THE COUNTRY. 12 ON THE RENTAL SIDE, CONDITIONS CONTINUE TO TIGHTEN IN MOST MARKETS, AND IN NEW ENGLAND, CONDITIONS ARE NOW CONSIDERED TIGHT. IN THE SOUTHEAST, WE HAD PREVIOUSLY BALANCED CONDITIONS ARE NOW CONSIDERED TO BE BALANCED TO TIGHT. AND IN THE NEXT SLIDE, WE LOOK AND WE SEE THAT FOR THE SECOND CONSECUTIVE QUARTER, ALL THREE PRICE INDICES, AND ONCE AGAIN, WE'LL SEE THREE LINES GOING ACROSS HERE, ALL THREE INDICES SHOWED AN INCREASE RELATIVE TO A YEAR AGO. AND ALL OF THE INDICES INCREASED AT A HIGHER RATE, COMPARED WITH THE INCREASE WE SAW LAST QUARTER. THE CASEN SCHILLER S & P INDEX WAS UP 3.6 INDEX, THE FHA INDEX WAS UP 4 PERCENT AND CORE LOGIC, UP 4 1/2%. >> THE NEXT MAP SHOWS THE CHANGE IN THE CORE LOGIC INDEX, THESE DATA ARE NOT SEASONALLY ADJUSTED AND THEY DO INCLUDE DISTRESSED SALES. NATIONALLY, AGAIN, THE INCREASE WAS 4 1/2%, WITH PRICES UP OR UNCHANGED IN EVERY SINGLE REGION, FOR THE FIRST TIME SINCE WE'VE BEEN DOING THESE BRIEFINGS, GAINS LED BY A 9.6% INCREASE IN THE PACIFIC AND THEY WERE FOLLOWED BY A 6.7% INCREASE IN THE ROCKY MOUNTAIN REGION. BOTH WHICH INCREASED FASTER THAN THE NATIONAL AVERAGE AND ARE SHOWN IN THE DARK BLUE COLOR. THE NORTHWEST, SOUTHWEST, SOUTHEAST, AND MID ATLANTIC REGIONS INCREASED BETWEEN TWO AND 4 1/2% AND THOSE ARE SHOWN IN THE MEDIUM SHADE OF 13 BLUE. THE REST OF THE NATION INCREASED BY LESS THAN 2 PERCENT, WITH PRICES UNCHANGED IN NEW ENGLAND. AND ON A STATE REFORM, THE LARGEST GAINS OCCURRED IN ARIZONA, WHICH WAS UP 18 PERCENT AND IDAHO, UP BY 12 PERCENT. THOSE ARE THE ONLY TWO STATES WITH A DOUBLE DIGIT PRICE INCREASE. RHODE ISLAND, ILLINOIS, CONNECTICUT, ALABAMA, NEW JERSEY, AND WISCONSIN WERE THE ONLY STATES TO DECLINE, BUT THOSE WERE ALL BY LESS THAN 3 PERCENT. ACCORDING TO THE CENSUS BUREAU, THE MEDIAN PRICE OF A NEW HOME IN THIRD QUARTER 2012 WAS 242, $900,000, UP 9 PERCENT FROM A YEAR AGO AND ACCORDING TO THE NATIONAL ASSOCIATION OF REALTORS, THE MEDIAN PRICE OF AN EXISTING HOME WAS $185,500. THIS WAS UP 10 PERCENT FROM A YEAR AGO. AND IN THE NEXT MAP, WE SEE THAT THIS SHOWS THE PRICE CHANGE IN THE MID ATLANTIC REGION AT THE METROPOLITAN LEVEL DURING THE THIRD QUARTER 2012, 16 OF THE 36 METROPOLITAN AREAS IN THE REGION HAD A DECLINE, ALTHOUGH 14 DECLINED BY LESS THAN 3 PERCENT, THE MOST SIGNIFICANT DECLINE WAS IN DOVER, THAT WAS DOWN BY 8 PERCENT. PRICES WERE UP 4 1/2% IN WASHINGTON, ALMOST 4 PERCENT IN PITTSBURGH, AND NEARLY 2 PERCENT IN RICHMOND. THE LARGEST INCREASE IN THIS REGION WAS IN DANVILLE, VIRGINIA, AT MORE THAN 14 7 PERCENT. >> THE NEXT SLIDE, WE'RE GOING TO LOOK AT THE FORECLOSURE MARKET. THE FORECLOSURE SITUATION REMAINS RELATIVELY UNCHANGED IN THE THIRD QUARTER OF 2012. THIS MAP SHOWS THE PERCENT OF HOME LOANS THAT ARE 90 DAYS OR MORE DELINQUENT IN FORECLOSURE OR REO AS OF SEPTEMBER 2012 AND JUST TO NOTE, REO STANDS FOR REAL ESTATE OWNED WHICH MEANS THE LENDER NOW OWNS THE PROPERTY. THE NATIONAL AVERAGE WAS 7 1/2% OF ALL LOANS IN THOSE THREE CATEGORIES. THIS WAS DOWN FROM 7.7% A YEAR AGO. THE THREE REGIONS IN THE TWO SHADES OF BROWN HAVE A RAISE THAT'S HIGHER THAN THE NATIONAL AVERAGE, THE OTHER SEVEN ARE BELOW THE NATIONAL AVERAGE. THE MOST DRAMATIC CHANGES FROM A YEAR AGO OCCURRED IN THE PACIFIC, WHICH WAS DOWN BY 1.9 PERCENTAGE POINTS. IN NEW YORK, NEW JERSEY, WHICH WAS UP BY 1.4 PERCENTAGE POINTS, FOLLOWED BY NEW ENGLAND, WHICH WAS UP BY .7 PERCENTAGE POINTS. ARIZONA, CALIFORNIA, AND NEVADA LED THE DECLINES IN THE NATION, DOWN BY 2.6, 1.8, AND 1.8 PERCENTAGE POINTS RESPECTIVELY, AND NEW YORK AND NEW JERSEY WERE UP BY 1.2 AND 1.9 PERCENTAGE POINTS RESPECTIVELY. THE NEXT MAP, WE'RE GOING TO LOOK AT REGIONS ONE AND TWO AT THE METROPOLITAN LEVEL, AND YOU CAN SEE THAT THE PERCENTAGE OF DISTRESSED LOANS IN EVERY METROPOLITAN AREA IN THESE TWO REGIONS 15 INCREASED DURING THE PAST YEAR. RIGHT ON THE NEXT SLIDE, WE'RE GOING TO START TO LOOK AT HOME SALES. SO EXISTING HOME SALES INCREASED BY 5.4% DURING THE 12 MONTHS ENDING SEPTEMBER 2012, COMPARED WITH THE PREVIOUS 12 MONTHS. SALES INCREASED IN NINE OF THE 10 REGIONS, WITH DOUBLE DIGIT INCREASES IN THE ROCKY MOUNTAINS, IN THE NEW ENGLAND REGIONS, SHOWN IN THE DARK SHADE OF BLUE, THE NORTHWEST, MIDWEST, GREAT PLAINS, AND SOUTHWEST INNED MEDIUM BLUE, INCREASED AT A FASTER RATE THAN THE NATIONAL AVERAGE, AND SALES DECLINED SLIGHTLY IN NEW YORK, NEW JERSEY BY LESS THAN 1 PERCENT, JUST TO NOTE, SOMETHING THAT'S NOT ON THE MAP, NEW HOME SALES WERE UP 26 PERCENT IN THE THIRD QUARTER OF 2012, RELATIVE TO A YEAR AGO. LOOKING CLOSER AT THE MIDWEST REGION HERE IN THE NEXT MAP, WE SEE WHERE SALES ARE UP 5.6%. SALES WERE UP IN 45 OF THE 55 METROPOLITAN AREAS REPORTED, AND THOSE ARE SHOWN IN BLUE, AND JUST TO HIGHLIGHT SOME OF THOSE CHANGES, SALES WERE UP BY 12 PERCENT IN CLEVELAND, 10 PERCENT IN CHICAGO, MORE THAN 5 PERCENT IN DETROIT, AND NEARLY 2 PERCENT IN INDIANAPOLIS. AND THE NEXT SLIDE, WE SEE SINGLE FAMILY HOME BUILDING AS MEASURED BY BUILDING PERMITS ISSUED INCREASE 27 PERCENT DURING THE THIRD QUARTER 2012 TO 127,700 HOMES. SINGLE FAMILY HOME BUILDING 16 INCREASED IN EVERY REGION OF THE COUNTRY, WITH GAINS RANGING FROM 15 PERCENT IN NEW YORK, NEW JERSEY, TO 55 PERCENT IN THE PACIFIC. IN THE NEXT SLIDE, WE'RE GOING TO SEE MULTI FAMILY PRODUCTION AND THAT NUMBER IS UP 52 PERCENT TO 78,550 UNITS PRODUCED DURING THE THIRD QUARTER OF 2012. THIS NUMBER OF MULTI FAMILY UNITS WAS UP IN EVERY REGION EXCEPT FOR THE GREAT PLAINS AND MID ATLANTIC WHERE THINGS REMAINED RELATIVELY UNCHANGED. INCREASES RANGED FROM 27 PERCENT IN THE ROCKY MOUNTAIN REGION TO 119 PERCENT IN THE SOUTHEAST. RENTAL MARKET CONDITIONS IN THE NEXT SLIDE HERE CONDITION TO TIGHTEN AROUND THE COUNTRY. ACCORDING TO REESE DATA WHICH COVERS 200 MARKET AREAS, VACANCY RATES WERE DOWN IN 176 MARKET AREAS, AND THEY WERE UP OR UNCHANGED IN 24 MARKET AREAS. THE AVERAGE VACANCY RATE FOR ALL AREAS COVERED DECLINED BY ONE PERCENTAGE POINT, FROM 5.6% LAST YEAR, TO 4.6% IN THE THIRD QUARTER OF 2012. THERE WERE EIGHT MARKET AREAS IN THE COUNTRY WITH A DECLINE OF TWO PERCENTAGE POINTS OR MORE AND THOSE ARE SHOWN IN THE DARK SHADE OF BROWN. ACCORDING TO THE CENSUS BUREAU, FOR THE ENTIRE U.S., THE RENTAL VACANCY RATE WAS 8.6% IN THE THIRD QUARTER OF 2012. THIS WAS DOWN FROM 9.8% A YEAR AGO. IN THE NEXT MAP HERE, WE'RE GOING TO TAKE A CLOSER LOOK 17 AT THE NEW YORK, NEW JERSEY REGION, VACANCY RATES WERE DOWN IN EIGHT OF THE 10 AREAS REPORTED, LED BY A DECLINE OF 1.3 PERCENTAGE POINTS IN ATLANTIC CITY CAPE MAY, AND THAT'S SHOWN IN THE MEDIUM SHADE OF BROWN WITH THE OTHER SEVEN AREAS HAVING MODEST DECLINES. THE ONLY AREA WITH AN INCREASE WAS ALBANY, NEW YORK, UP BY LESS THAN 1 PERCENT SHOWN IN BLUE AND THE RATE WAS UNCHANGED IN WESTCHESTER. AND NOW TAKE A LOOK AT MARKET RENTS. MARKET RENTS WERE UP BY AN AVERAGE OF 2.9% NATIONALLY IN THE MARKETS COVERED BY REESE FOR THE THIRD QUARTER 2011 TO THE THIRD QUARTER 2012. AREAS IN LIGHT BLUE INCREASED AT A RATE THAT WAS LESS THAN THE NATIONAL RATE, IN DARK BLUE, THEY INCREASED FASTER THAN THE NATIONAL RATE, AND THOSE AREAS IN BROWN HAD DECLINES IN RENTS. THE AVERAGE MARKET RENT IN THE THIRD QUARTER OF 2012 FOR THE 200 AREAS WAS $1091, THIS COMPARES WITH $1060 LAST YEAR. RENTS INCREASED IN 197 OF THE MARKET AREAS REPORTED. RENTS INCREASED BY 3 PERCENT OR MORE IN 27 OF THOSE MARKET AREAS, SHOWN IN THE DARK BLUE. AND THIS WAS LED BY INCREASES OF 5.9% IN SAN FRANCISCO, 4 1/2% IN SEATTLE, AND 4.3% IN SAN JOSE. AND NOW WE'RE GOING TO TAKE A CLOSER LOOK AT THE SOUTHEAST REGION. THE ONLY THREE AREAS IN THE COUNTRY WITH RENT DECLINES 18 WERE IN THE SOUTHEAST. AND THESE INCLUDED FORT MYERS, FLORIDA, MYRTLE BEACH, SOUTH CAROLINA AND ATHENS, GEORGIA AND THE RENT DECLINES WERE ALL BY LESS THAN 1 PERCENT. RENTS WERE UP IN THE OTHER 45 METROPOLITAN AREAS OF THE REGION, AND IN SOME OF THOSE AREAS, THE INCREASE WAS BY 3 PERCENT OR MORE AND THAT INCLUDED BIRMINGHAM, CHARLESTON, CHATTANOOGA, LEXINGTON, AND NASHVILLE. AND SO IN CONCLUSION, YEAR OVER YEAR JOB GROWTH FOR THE THIRD QUARTER OF 2012 WAS 1.4%. SALES MARKETS GENERALLY REMAINED SOFT IN THE THIRD QUARTER OF 2012, ALTHOUGH WE CONTINUE TO SEE IMPROVEMENTS THROUGHOUT THE COUNTRY. PRICES IN SALES WERE BOTH UP AGAIN THIS QUARTER. RENTAL MARKET CONDITIONS ARE BALANCED TO TIGHT THROUGHOUT THE NATION AND THOSE CONDITIONS CONTINUE TO TIGHTEN WITH RENTS CONTINUING TO RISE AND VACANCY RATES CONTINUING TO FALL. FOR ADDITIONAL INFORMATION, YOU CAN GO TO THE THIRD QUARTER 2012 U.S. HOUSING MARKET CONDITIONS REPORT, YOU CAN TALK WITH YOUR LOCAL REGIONAL OR FIELD ECONOMISTS, OR YOU CAN FEEL FREE TO CONTACT ME. NOW IT'S MY PLEASURE TO INTRODUCE DR. KURT YUSOWSKY, FROM THE OFFICE OF ECONOMIC AFFAIRS, WHO WILL BE OVERSEEING THE DISCUSSION ON THE OIL AND GAS TEAM. THANK YOU VERY MUCH. >> THANK YOU KEVIN. IT SEEMS TO BE MORE GOOD NEWS 19 EVERY TIME YOU COME UP ON THE STAGE. SO THAT'S ENCOURAGING. OUR NEXT PANEL, THE PANEL WE HAVE TODAY IS GOING TO BE TALKING ABOUT THE BOOM TOWN EFFECTS OF OIL AND GAS EXPLORATION ON LOCAL HOUSING MARKETS. THIS IS AN ISSUE WE'VE BEEN LOOKING AT FOR PROBABLY ABOUT 18 MONTHS. SERIOUSLY, IN MY OFFICE, THE FIRST INDICATIONS OF IT WERE COMPLAINTS REGARDING FAIR MARKET RENTS IN CERTAIN RURAL AREAS THAT HAD OIL AND GAS ACTIVITY, THEY STARTED COMING FROM TEXAS, THAT THE VOUCHER PROGRAMS WEREN'T WORKING. AND SO AFTER THAT, WE WERE LOOKING AT THE ISSUES HERE, AND WE THOUGHT WELL, WE'D BETTER TAKE A CLOSER LOOK. WE'VE GOT A FIELD TASK FORCE TOGETHER, TASK FORCE OF FIELD ECONOMISTS, TWO OF WHOM ARE HERE TODAY. THEY WERE SELECTED BY THE GROUP TO COME AND PRESENT WHAT THEY FOUND AFTER THEY STUDIED IT. I WOULD LIKE TO START WITH A LITTLE BASIC ECONOMICS. I HAVE TO USE POWER POINT BECAUSE CHALK IS NO LONGER ON THE GSA SCHEDULE. AN ECONOMIST ALWAYS WILL START WITH DRAWING DEMAND AND SUPPLY CURVES, LOOKING AT THIS MARKET WOULD BE A RENTAL MARKET, RENT AND UNITS, AND -- NOW, THIS IS A SHORT RUN SUPPLY CURVE, AND WHAT YOU SEE ABOUT IT IS IT HAS THIS L SHAPE, BACKWARDS L SHAPE. IN THE SHORT RUN, IF DEMAND FOR HOUSING SLIPS, UNITS DON'T GO AWAY, THEY JUST KIND OF COME OFF OF THE -- THEY'RE 20 JUST UNOCCUPIED. RENTS WILL GO DOWN A LITTLE BIT. WHEN HOUSING MARKETS ARE VERY TIGHT IN THE SHORT RUN, RENTS CAN START TO RISE VERY RAPIDLY AND WE GET INTO SORT OF THIS CHAOTIC ZONE HERE WHERE THE CURVE IS ALMOST STRAIGHT UP AND DOWN. YOU HAVE SOME NOTION OF THE STOCK THAT -- THERE'S ALWAYS A DEFINITIONAL ISSUE HERE, WHAT CONSTITUTES A HABITABLE UNIT. AND AS I SAID, WHEN YOU GET TO A POINT WHERE WE START TO BE BLUR THANK DEFINITION OF HABITABLE UNIT AS PART OF THE SUPPLY, SORT OF THAT CHAOTIC ZONE UP THERE, AND IN AN AVERAGE MARKET, YOU HAVE SOME GAP BETWEEN THE UNITS THAT ARE ACTUALLY BEING OCCUPIED, WHERE DEMAND, IT INTERSECTS THE SUPPLY CURVE AT A PARTICULAR RENT, AND THE GAP BETWEEN THE STOCK THAT WE MEASURE AND WHAT IS ACTUALLY OCCUPIED ARE THE VACANT UNITS. SO IF WE HAVE AN UPWARD SHIFT IN DEMAND, AND DEMAND IS DETERMINED BY THE NUMBER OF HOUSEHOLDS THAT ARE IN AN AREA AND HOW MUCH MONEY THEY HAVE, YOU HAVE AN UPWARD SHIFT IN DEMAND OR LEFTWARD SHIFT IN DEMAND, THE VACANCY RATES GOES DOWN, THE RENTS GO UP A LITTLE BIT. YOU CAN GO BACK AND FORTH THERE AND SEE THAT. NOW, WHAT HAPPENS IN SOME OF THESE AREAS THAT ARE IMPACTED BY GAS AND OIL IS YOU HAVE A VERY LARGE INFLUX OF PEOPLE COMING INTO AN AREA RELATIVE TO THE SIZE OF THE POPULATION, AND THEY HAVE A 21 LOT OF MONEY. THEY'RE MAKING MORE MONEY THAN THE AVERAGE PERSON WHO ALREADY LIVES THERE, THEY MAY HAVE, IN ADDITION, A HOUSING ALLOWANCE PAID BY THEIR EMPLOYER THAT THEY CAN USE TO TRY TO RENT HOUSING IN THE LOCALITY WHERE THEY'RE WORKING. AND THIS DRIVES US INTO THAT SORT OF CHAOTIC REGION WHERE SUPPLY BECOMES VERTICAL, RENTS RISE RAPIDLY, AND WE HAVE -- WE START RUNNING INTO MANY OF THE PROBLEMS THAT WE'RE GOING TO BE DISCUSSING HERE TODAY. >> SO I'D LIKE TO INTRODUCE TO YOU FROM OUR GAS AND OIL TASK FORCE, SAM YOUNG, WHO'S IN THE REGION EIGHT OFFICE IN DENVER, AND TIMOTHY McDONALD -- MCNALLY, I'M SORRY. TIMOTHY MCNALLY, WHO IS IN OUR PHILADELPHIA OFFICE. AND THEN AFTER -- THEY'RE GOING TO PRESENT ON A LITTLE BIT MORE INFORMATION ON WHY WE'RE SEEING ALL THIS TREMENDOUS NEW GAS AND OIL RESOURCES COMING ONLINE, WHERE IT'S HAPPENING IN THE COUNTRY, AND WHAT'S GOING ON IN DIFFERENT HOUSING MARKETS AROUND THE COUNTRY. THEN WE'LL BE HEARING FROM SOME REGIONAL AND FIELD OFFICE DIRECTORS FROM REGION THREE. WE HAVE JANE VINCENT, WE'LL HAVE ON THE PHONE FROM THE COLUMBUS FIELD OFFICE TOM LEACH, WE'LL HAVE -- HEAR FROM MARK BRAZENA FROM REGION SIX, IN TEXAS, WHERE WE FIRST HEARD ABOUT OUR PROBLEM, AND RICK GARCIA FROM THE COLORADO OFFICE, REGION EIGHT, WHERE 22 THERE'S A LOT OF ACTIVITY, PARTICULARLY IN NORTH DAKOTA. GENTLEMEN? GOOD AFTERNOON. I DON'T HAVE ANY SUPPLY AND DEMAND CURVE, SO YOU CAN RELAX A LITTLE BIT. ON BEHALF OF THE GAS OIL TASK FORCE WE WANTED TO THANK YOU FOR ATTENDING THE PRESENTATION TODAY. THE TASK FORCE CURRENTLY CONSISTS OF NINE EMAD FIELD AND HEADQUARTERS STAFF AND IT GREW OUT OF EMAD'S OBSERVATION OF HOUSING MARKET DISLOCATIONS IN AREAS THAT WERE EXPERIENCES INCREASED OIL AND GAS DRILLING ACTIVITY AND WE RECENTLY PUBLISHED A PAPER OUTLINING THE INITIAL SUMMARY OF OUR FINDINGS AND THERE'S A LINK TO THE PAPER AT THE END OF OUR POWER POINT. AGAIN, MY NAME IS SAM AND MY PART NEXT TIM MCNALLY, WE'RE GOING TO TALK FOR 15 OR 20 MINUTES, WE'LL ANSWER A COUPLE OF BRIEF QUESTIONS AND I KNOW THERE'S A Q & A AT THE END OF THE ENTIRE PRESENTATION. SO BEFORE WE BEGIN, IF YOU ARE ON LIVE MEETING, IF YOU HIT F5 ON YOUR KEYBOARD IT WILL MAKE THE VIEWING AREA BIGGER AND YOU WON'T MISS ANYTHING. SO IF WE CAN GET TO THE POWER POINT PART, I WILL BEGIN. SO IF WE SEE THIS PICTURE, THERE'S A LOT GOING ON. BUT THE PICTURE -- THE DRILL ON THE LEFT HIGHLIGHTS THE OLDER VERTICAL WELL BORE TECHNOLOGY AND ON THE RIGHT IS THE NEWER HORIZONTAL AND DIRECTION AT DRILLING WELL. AND REALLY, THE HORIZONTAL 23 AND DIRECTIONAL DRILLING, IT ALLOWS A COMPANY TO MORE CLOSELY FOLLOW AN ENERGY RESERVE, PROVIDING MORE CONTACT AREA TO DRILL, AS YOU NOTICE IN THE BOTTOM OF THE PICTURE. IN ADDITION, THE TECHNOLOGY ALLOWS A COMPANY TO REDRILL HORIZONTAL WELL BORES FROM A SINGLE VERTICAL WELL SHAFT AND TO CHANGE DRILLING DIRECTION AS NEEDED. IF YOU'RE TRYING TO VISUALIZE THIS, IF YOU'RE LOOKING AT THE DRILL FROM ABOVE, THE VERTICAL WELL BORE SHAFT GOES DOWN AND THE COMPANIES HAVE THE ABILITY TO GO OUT LIKE SPOKES ON A WHEEL, THEN GO MULTIPLE DIRECTIONS AT MULTIPLE ELEVATIONS THROUGHOUT THE PLAY. AND SO THEN THIS NEXT SLIDE, AGAIN, IT'S A BUSY PICTURE, SO I APOLOGIZE THIS, BUT THIS TECHNOLOGY HIGHLIGHTED HERE IS HYDRAULIC FRACTURING, THE TECHNIQUE INVOLVING PUMPING LARGE AMOUNTS OF FLUID INTO A WELL BORE TO FRACTURE THE ROCK. THE FRACTURE IS HELD OPEN WITH SAND GRAINS, THEN THE OIL AND GAS THAT'S IN THE SURROUNDING ROCK FLOWS INTO THAT WELL BORE, UP AND OUT TO THE SURFACE, AND IS TRANSPORTED. IT'S REALLY A COMBINATION OF THE TWO TECHNOLOGIES THAT HAS INCREASED THE TECHNICALLY RECOVERABLE AND ECONOMICALLY RECOVERABLE OIL AND GAS RESERVES IN THE U.S. IN FACT, UNITED STATES OIL PRODUCTION HAS INCREASED 25 PERCENT SINCE 2008 AND IT IS EXPECTED TO REACH 8 1/2 MILLION BARRELS PER DAY IN 24 2012. IN THE YEAR 2000, SHALE GAS WAS ONLY 2 PERCENT OF U.S. NATURAL GAS PRODUCTION. TODAY, IT IS 37 PERCENT. THERE ARE A COUPLE OF PRIMARY REVENUE STREAMS FROM OIL AND GAS. AT THE STATE LEVEL, SEVERANCE TAXES ARE THE MAIN FORM OF REVENUE FROM OIL AND GAS DRILLING AND THE SEVERANCE TAX IS A TAX LEVIED ON THE EXTRACTION OR LITERALLY THE SERVING OF THE RESOURCE FROM THE EARTH, AND THAT TOTALED 14.7 BILLION IN 20 # ONE, WHICH IS A DRAMATIC INCREASE FROM THE 4.9 BILLION IN 1997. FEDERAL LEASES OF OIL AND GAS EXPLORATION GENERATED 9 BILLION IN ROYALTY REVENUE IN THE YEAR 2009. NOW, WITH REGARD TO EMPLOYMENT, ACCORDING TO A RECENT REPORT BY PRICE WATERHOUSE COOPER, THE OIL AND NATURAL GAS INDUSTRY SUPPORTED 5.8 MILLION INDIRECT AND INDUCED JOBS. AND AN ADDITIONAL 1.2 MILLION INDIRECT AND INDUCED JOBS FROM CAPITAL INVESTMENTS MADE BY THE INDUSTRY. THAT SAME YEAR, THOSE JOBS GENERATED 357 BILLION IN LABOR INCOME, AND INDUCED -- AND VALUE ADDED FROM THE DIRECT AND INDUCED JOBS WAS AN ADDITIONAL $616.7 BILLION. NOW, THE SECOND BULLET, OIL AND NATURAL GAS EMPLOYMENT CAN BE BROKEN DOWN INTO TWO BROAD CATEGORIES: UPSTREAM AND DOWNSTREAM EMPLOYMENT. UPSTREAM JOBS ARE RELATED TO THE EXPLORATION, DRILLING AND PRODUCTION OF OIL AND NATURAL GAS, AND THE DOWNSTREAM JOBS ARE FOCUSED ON THE 25 TRANSPORTATION, DISTRIBUTION, AND SALE OF THOSE RESOURCES. THE MAJORITY OF THE EMPLOYMENT GROWTH IS EXPERIENCED DURING THE UPSTREAM ACTIVITIES AND IT CAN CAUSE A FRONT LOADED BUMP IN EMPLOYMENT THAT MAY NOT BE SUSTAINED THROUGH THE ENTIRE ENERGY BOOM CYCLE. ACCORDING TO THE BUREAU OF LABOR STATISTICS, IN 011, APPROXIMATELY 186,300 PEOPLE WERE EMPLOYED IN THE UPSTREAM OIL AND GAS EXTRACTION SECTOR WITH AN AVERAGE HOURLY SALARY OF 35.15, AND THAT INCLUDED MORE THAN 30,000 PETROLEUM ENGINEERS, WITH AN AVERAGE HOURLY SALARY OF $66.82. AND THIS IS COMPARED TO THE NATIONAL AVERAGE HOURLY EARNINGS OF 21.74, IN 2011. NOW, ACCORDING TO AN IHS GLOBAL INSIGHTS REPORT FROM OCTOBER OF THIS YEAR, APPROXIMATELY 1.7 MILLION UNCONVENTIONAL AND UPSTREAM JOBS WERE IN THE ENTIRE SECTOR IN 2012, AND THAT'S EXPECTED TO EXPAND TO 2 1/2 MILLION BY 2015. NOW, THIS SLIDE IS A MAP HIGHLIGHTING THE EIGHT OIL AND GAS RESERVE AREAS THAT THE TASK FORCE IS MONITORING. THE HOUSING MARKETS ASSOCIATED WITH THESE ENERGY RESERVES ARE THE AREAS WE'RE KEEPING A CLOSE EYE ON AS WE STUDY THE EFFECTS OF ENERGY EXPLORATION ON LOCAL HOUSING MARKETS. THERE ARE OTHER AREAS WHERE MORE RECENT EXPLORATORY DRILLING HAS OCCURRED BUT THESE ARE THE AREAS THAT WE'RE CONCENTRATING ON FOR NOW. NOW, THE NEXT SLIDES WILL 26 PROVIDE A BRIEF OVERVIEW OF EACH OF THE EIGHT REGIONS. IN THE FIRST AREA IS THE BAKKEN RESERVE IN NORTH DAKOTA AND MONTANA. WELL DRILLING PERMITS HAVE INCREASED IN BOTH STATES FROM A YEAR AGO AND WHILE EMPLOYMENT HAS ALSO INCREASED IN BOTH STATES, NORTH DAKOTA HAS BY FAR BEEN THE PRIMARY BENEFICIARY OF INCREASED EMPLOYMENT, 12,050 INCREASE IN NORTH DAKOTA AS OPPOSED TO 1100 JOBS IN MONTANA. NOW, THE FIRST OIL REFINERY IN THE U.S. IN THE PAST 30 YEARS HAS BEEN APPROVED BY THE DEPARTMENT OF INTERIOR AND WILL BE LOCATED ON THE FORT BERTHOLD RESERVATION, 125 MILES EAST OF WILLISTON, NORTH DAKOTA. IF YOU LOOK ON THE MAP, WILLISTON IS VERY APPROXIMATELY WHERE THE E IS IN THE BORDER OF BAKKEN, AS A REFERENCE POINT. THE REFINERY IS EXPECTED TO HAVE A PRODUCTION CAPACITY OF 13,000 BARRELS PER DAY, AND IS ESTIMATED TO BE COMPLETE NEAR THE END OF 2014. MCVAIL ELEMENTARY SCHOOL IN THE TOWN OF WILLISTON, NORTH DAKOTA REOPENED FOR THE 2012-2013 ACADEMIC YEAR AND FULLY EXPECTED BETWEEN 600 TO 1200 ADDITIONAL NEW STUDENTS TO COME TO THE SCHOOL, AND THAT WAS BASED ON NEW HOME CONSTRUCTION ESTIMATES FOR THE AREA. HOWEVER, ACTUAL ADDITIONAL ENROLLMENT WAS SUBSTANTIALLY LOWER WITH ONLY ABOUT 250 STUDENTS ENROLLING. NOT ALL OF THE ENERGY WORKERS THAT ARE MOVING TO THE AREA ARE BRINGING THEIR FAMILY 27 WITH THEM WHEN THEY COME. FINALLY, AGAIN, IN WILLISTON, NORTH DAKOTA, WITHIN THE CITY LIMITS, THEY ISSUED A SIX MONTH MORATORIUM ON TEMPORARY HOUSING, AS PERMANENT HOUSING CONSTRUCTION HAS INCREASED IN THE AREA AND THIS WILL BRING THE TOWN IN LINE WITH THE COUNTY, WILLIAMS COUNTY, WHERE IT'S LOCATED, WHICH ALREADY HAS AN EXISTING MORATORIUM AFTER THEY ALLOWED APPROXIMATELY 9000 TEMPORARY BEDS IN THE COUNTY. NOW, THE NEXT TWO AREAS ARE THE NIOBRARA AND PICEANCE SHALE LARGELY IN COLORADO WITH SPILLOVER INTO UTAH AND WYOMING. THIS IS A NATURAL GAS PLAY AND PERMITS ARE DECLINING, THE LOW PRICE FOR NATURAL GAS HAS CAUSED SOME ENERGY EMPLOYEES TO MOVE SOME TO NORTH DAKOTA AND SOME TO SHUT DOWN OPERATIONS COMPLETELY AS DRILLING IS NO LONGER ECONOMICALLY VIABLE IN THIS AREA UNTIL PRICES INCREASE AGAIN. NOW, THIS HAS HAPPENED IN THE PAST, IN THE PICEANCE AREA IN COLORADO. IN THE EARLY 1980S, EXXON-MOBIL MOVED IN AND BEGAN INVESTING HEAVILY IN THE REGION AND THE STATE OF COLORADO PUBLISHED A HOUSING NEEDS ANALYSIS THAT ESTIMATED THE AREA WOULD NEED 126,000 NEW HOUSING UNITS IN THE AREA BY THE YEAR 2000. SHORT TIME LATER ON MAY SEVEN, 1982, THE COMPANY CLOSED ITS OPERATIONS DUE TO LOW ENERGY PRICES AND THE AREA WENT INTO A STEEP ECONOMIC DECLINE. AT THE TIME OF THE CLOSURE, 28 700 APARTMENTS AND 650 HOMES WERE UNDER CONSTRUCTION, AND THAT WAS IN ADDITION TO THE NEW HOUSING ALREADY BUILT FOR THE 1700 RESIDENTS OF BATTLEMENT MESA, A NEW TOWN THAT HAD BASICALLY BEEN BUILT FROM SCRATCH. A YEAR LATER IN 1983, THE VACANCY RATE WAS 80 PERCENT, RENTS HAD FALLEN BY NEARLY HALF, AND THE POPULATION HAD DROPPED BY TWO-THIRDS. NOW, THE SECOND AREA, THE NIOBRARA, IS PART OF THE LONGER DENVER JEWELS FORMATION AND LARGELY AN OIL PLAY AT THIS POINT AND THE INFLUX OF WORKERS TO THE AREA HAS CAUSED RENTS AND OCCUPANCY RATES TO RISE SHARPLY IN THE LAST YEAR. NOW, AT THIS POINT I'LL TURN IT OVER TO TIM MCNALLY AND HE'LL COMPLETE THE PRESENTATION. >> THANK YOU SAM. THE FORMATION RUNS FROM SOUTHWESTERN NEW YORK TO SOUTHERN WEST VIRGINIA AND A LARGELY A NATURAL GAS PLAY. DEVELOPMENT START SECOND 004 WHEN THE FIRST HYDRAULICALLY FRACTURED WELL WAS DRILLED, DRILLING OCCURRED FOR THE NEXT 20 TO 30 YEARS, IN PENNSYLVANIA AND WEST VIRGINIA, DRILLING IS LARGELY OCCURING IN RURAL AREAS. MARCELLUS SHALE FORMATION HAS BEEN IMPACTED BY LOW NATURAL GAS PRICE, WELL STARTS HAVE DECLINED SUBSTANTIALLY AND MERGERS AND ACQUISITIONS ACTIVITY MELTED TO MARCELLUS HAS REDUCED AS WELL. DURING THIRD QUARTER 2012, NO MERGERS AND ACQUISITIONS WERE COMPLETED, COMPARED WITH DEALS VALUED AT 1.6 BILLION 29 COMPLETED DURING THE SECOND QUARTER OF 2012. THE SHALE FORMATION RUNS FROM NEW YORK TO WEST VIRGINIA AND EXTENDS WEST WAND INTO EASTERN OHIO. THE SHALE FORMATION IS GEOLOGICALLY LOCATED BETWEEN THE MARCELLUS SHALE FORMATION. ACCORDING TO RECENT ESTIMATES FROM THE U.S. GEOLOGICAL SURVEY, IT CONTAINS 38 TRILLION CUBIC FEET OF NATURAL GAS AND 940 BILLION BARRELS OF OIL, VALUED AT MORE THAN $220 BILLION. THIS ESTIMATE IS SENSITIVE TO BOTH COMMODITY PRICES AND PRODUCTION COSTS. DEVELOPMENT OF THE UTICA SHALE IS IN ITS EARLY STAGES AND IS PRIMARILY OCCURRING IN OHIO WHERE THE PROFITABLE OIL AND NATURAL GAS BYPRODUCTS ARE LOCATED. THE BASIN FORMATION COVERS 20 COUNTIES IN WESTERN TEXAS AND EASTERN NEW MEXICO AND IS AN OIL AND GAS PLAY. WHILE DRILLING BEGAN IN 1925, RECENT TECHNOLOGICAL ADVANCES MENTIONED IN EARLIER SLIDES HAS GENERATED RENEWED INTEREST IN THIS FORMATION. ACCORDING TO LOCAL ANALYST ESTIMATES, THE RENTAL MARKET VACANCY RATE IN THE PERMIAN BASIN AREA IS 2 PERCENT. THE $2.4 BILLION TEXAS CLEAN ENERGY PROJECT IN MIDLAND AND ODESSA WILL PRODUCE ELECTRICITY USED IN CARBON CAPTURE TECHNOLOGY AND WILL EMPLOY 150 PEOPLE. SCHEDULED TO OPEN LATE 2014, THE TEXAS CLEAN ENERGY PROJECT WILL CAPTURE 90 PERCENT OF ITS CARBON 30 EMISSIONS, WHICH WILL THEN BE PUMPED INTO THE WELL BORE TO BE USED IN THE EXTRACTION PROCESS. THE EAGLE FORD SHALE LOCATE SOUTH TEXAS IS A NATURAL GAS PLAY COVERING 14 COUNTIES. ACCORDING TO THE TEXAS RAILROAD COMMISSION, NEARLY 3225 NEW PERMITS WERE ISSUED THROUGH SEPTEMBER 2012, COMPARED WITH APPROXIMATELY 2825 PERMITS IN 2011. THE INCREASE IN PERMITTING ACTIVITY IS RELATED TO OIL. NOT GAS. NATURAL GAS PRODUCTION IN THE EAGLE FORT AREA DECLINED 3.7% DURING 2012, COMPARED WITH 2011. ACCORDING TO A STUDY BY THE UNIVERSITY OF TEXAS AT SAN ANTONIO'S INSTITUTE FOR ECONOMIC DEVELOPMENT THE EAGLE FORD SHALE SUPPORTED 3000 FULL-TIME JOBS IN 2011. THE BARNETT SHALE IN NORTHEASTERN TEXAS IS A NATURAL GAS PLAY COVERING 25 COUNTIES. PORTIONS OF THIS FORMATION UNDERLIE THE DALLAS FORT WORTH AREA. WHILE DEVELOPMENT OF THIS FORMATION STARTED IN 1982, THE BARNETT SHALE HAS RECENTLY BE IMPACTED BY LOW NATURAL GAS PRICES. NEW WELL PERMITS DECLINED BY 30 PERCENT, COMPARED WITH THE YEAR EARLY. THE IMPACT OF THE DEVELOPMENT OF THE BARNETT SHALE IS HAVING ON THE LOCAL HOUSING MARKET IS MINIMAL BECAUSE OF THE FORMATIONS IN PROXIMITY TO THE DALLAS FORT WORTH METROPOLITAN AREA. THIS SLIDE PRESENTS A FEW EXAMPLES TO THE TYPES OF WORK 31 FORCE, HOUSING AVAILABLE TO OIL AND GAS WORKERS. MANY WORKERS REMAIN IN THE AREA FOR WEEKS OR MONTHS AT A TIME WITH BREAK TOSS RETURN TO THEIR PLACE OF RESIDENCE AND THEN RETURNING TO THE OIL AND GAS FIELDS. WORK FORCE HOUSING HAS HELPED TO ALLEVIATE THE STRAIN ON RENTAL MARKETS, BUT ITS USE IS NOT WIDESPREAD ACROSS ALL SHALE AREAS. >> ONE OF THE TASK FORCE'S PRIMARY RESEARCH TOPICS IS THE IMPACT OF GAS AND OIL DEVELOPMENT IS HAVING ON AFFORDABLE HOUSING, THE TASK FORCE EVIDENCE HAS SUGGESTED THE SUPPLY OF AVAILABLE, AFFORDABLE HOUSING IS OFTEN QUICKLY ABSORBED BY THE INFLUX OF TEMPORARY WORKERS. SOME OIL COMPANIES PROVIDE A HOUSING STIPEND UP TO $1000 A MONTH, WHILE OTHER COMPANIES MAY DIRECTLY OFFER HIGHER RENTAL RATES THAN RESIDENTS CAN AFFORD. ACCORDING TO HOUSING AUTHORITIES IN -- CURRENT TENANTS HAD TO VACATE UNITS FOR WORKERS HIRED BY OIL AND GAS FIRMS, SUBCONTRACTORS, AND SUPPLIERS. DURING THE PAST TWO YEARS IN THE BAKKEN AREA, TWO SECTION A PROJECTS HAVE OPTED OUT OF THE RENTAL ASSISTANCE CONTRACTS, ONE, A 30-UNIT PROJECT IN WILLIAMS COUNTY AND YOUTH, A 96 PROJECT IN WARD COUNTY. AFTER OPTING OUT RENT AT THE TWO BEDROOM -- RENT FOR A TWO BEDROOM UNIT AT THE WARD COUNTY PROJECT INCREASED BY 126 PERCENT TO $1100. IN RESPONSE TO THE SHARP INCREASE IN RENTAL RATES IN 32 SOME OIL AND GAS AREAS, THE OFFICE OF POLICY DEVELOPMENT AND RESEARCH DEVELOPED A METHODOLOGY FOR DETERMINING EMERGENCY EXEMPTION PAYMENT STANDARDS FOR IMPACTED AREAS. EMERGENCY PAYMENT STANDARDS MAY EXCEED 120 PERCENT OF THE APPLICANT'S FAIR MARKET RENTS. APPROVED HOUSING AUTHORITIES INCLUDE MINOT HOUSING AUTHORITY, BURLY HOUSING COUNTY AUTHORITY, FOSTER, MCHENRY, MONTRAIL HOUSING AUTHORITY, STUDSMAN HOUSING AUTHORITY, ALL IN NORTH DAKOTA, AND SUSQUEHANNA IN PENNSYLVANIA. THE BRADFORD AND TIOGA COUNTY HOUSING AUTHORITY IN PENNSYLVANIA IS EXPECTED TO REQUEST APPROVAL FOR EMERGENCY PAYMENT STANDARDS SOON. THE CURRENT TRANSPORTATION AND INFRASTRUCTURE, INCLUDING BRIDGES AND HIGHWAYS IN MANY OF THESE RURAL AREAS, IMPACTED BY OIL AND GAS DEVELOPMENT WAS NOT DESIGNED TO ACCOMMODATE THE VOLUME OF HEAVY TRUCKS AND EQUIPMENT ACCOMPANYING OIL AND GAS DRILLING. FOR EXAMPLE, THE NORTH DAKOTA DEPARTMENT OF TRANSPORTATION ESTIMATES THAT TRUCK TRAFFIC ON ROUTE 85, WHICH CONNECTS WILLISTON AND WILLIAMS COUNTY, WATFORD CITY IN MCKENZIE AND BOWMAN IN BOWMAN COUNTY, INCREASED BY 124 PERCENT IN 2011, COMPARED WITH 2010. THE UPPER GREAT PLAINS INSTITUTE OF TRANSPORTATION AT NORTH DAKOTA STATE UNIVERSITY ESTIMATES THAT AN ADDITIONAL $907 MILLION WILL 33 BE NEEDED TO MAINTAIN INDUSTRY ACTIVITY FOR OIL-IMPACTED ROADS OVER THE NEXT 20 YEARS. THE BARNETT SHALE AREA, $342 MILLION WILL BE NEEDED TO FIX OR REPLACE NEARLY 400 MILES OF ROAD IN DEWITT COUNTY EAST OF SAN ANTONIO. THERE ARE SOME DATA IMPACTING OUR RESEARCH, THE TRANSIENT NATURE OF THIS TYPE OF WORK OMITS WORKERS FROM BEING COUNTED WHERE THEY'RE AFFECTING HOUSING MARKETS, JOB DATA IS AVAILABLE FROM THE BUREAU OF LABOR STATISTICS ON A MONTHLY BASIS, THE DATA BASED ON THE SURVEY BY THE CENSUS BUREAU, OBTAINED FROM EMPLOYERS ACROSS THE COUNTRY. THESE DATA ARE REPORTED BY PLACES OF EMPLOYMENT AND ARE TO INCLUDE DIRECT EMPLOYMENT, WHICH INCLUDES THOSE EMPLOYEES OF FIRMS WHICH MAY CONTRACT THEM OUT TO WORK ON THE SITE OF ANOTHER EMPLOYER. UNLESS EITHER THE DIRECT EMPLOYER OR THE EMPLOYER OF RECORD OVERSEEING THE ACTUAL SITE WORK IS ACTUALLY LOCATED WITHIN A PARTICULAR SHALE AREA, IT IS UNLIKELY THAT THE JOBS IN AN OIL AND GAS AREA WILL ACTUALLY BE REPORTED IN THE STATISTICS FOR SUCH COUNTY. MOVING FORWARD, THE INTERNATIONAL ENERGY AGENCY FORECAST THE U.S. TO BECOME THE LARGEST GLOBAL OIL PRODUCER BY AROUND 2020. AS OIL AND GAS DEVELOPMENT EXTRACTION INCREASES, ESPECIALLY IN RURAL AREAS, DISRUPTIONS IN LOCAL HOUSING MARKETS MAY CONTINUE. THROUGH THE EFFORTS OF THE 34 GAS AND OIL TASK FORCE, HUD NOW HAS A FOUNDATION FOR UNDERSTANDING THE EFFECTS OF OIL AND GAS EXPLORATION AND PRODUCTION ON U.S. HOUSING MARKETS AND HUD PROGRAMS. WITH CONTINUED ANALYSIS, RESEARCH AND EXPERIENCE, THE TASK FORCE IS COMMITTED TO DEVELOPING A METHODOLOGY FOR ASSESSING THE EFFECT OF OIL AND GAS PRODUCTION ON AN AREA'S EXISTING HOUSING STOCK, HOUSING DEMAND, HOMELESSNESS, AND HUD PROGRAMS AND RESOURCES. I'D LIKE TO THANK THE OTHER GAS AND OIL TASK FORCE MEMBERS FOR THEIR HELP IN GATHERING DATA, INCLUDING STEVE KOMADINA, TIM McDONALD AND FERNANDO RAMIREZ, AND DON DARLING AN BEVERLY HARVEY FOR THEIR SUPPORT AND GUIDANCE. A LINK TO THE ARTICLE PUBLISHED IN U.S. HOUSING MARKET CONDITIONS IS AVAILABLE AT THE BOTTOM OF THIS SLIDE. THANK YOU. >> THANK YOU. I HAD A COUPLE OF POINTS I WANTED YOU TO ELABORATE ON A LITTLE BIT BEFORE WE GET TO THE DISCUSSION WITH THE FOLKS, THE REGIONAL ADMINISTRATORS IN THE FIELD OFFICE. AND THEN MAYBE TAKE A COUPLE OF QUESTIONS FROM THE AUDIENCE, AS WELL. FIRST OFF, YOU TALKED A LITTLE ABOUT PRICE VOLATILITY. AND THE IMPACT IT'S GOING TO HAVE ON DRILLING AREAS. AND THE DIFFERENT PRODUCT THAT IS ARE PRODUCED IN THE DIFFERENT AREAS. 35 CAN YOU TALK A LITTLE ABOUT THAT? LIKE I REMEMBER A DISCUSSION ABOUT WET VERSUS DRY GAS, AND WHAT ARE THE -- SORT OF THE CONTROLLING INFLUENCES ON THE PRICES OF THE RESOURCES. >> I CAN TAKE THAT. THE EASIEST WAY TO THINK ABOUT IT IS THAT THE NATURAL RESOURCE IN THE GROUND IS BASICALLY INVENTORY FOR THE COMPANY. STORED INVENTORY. AND THEY CAN TURN IT ON OR TURN IT OFF AT WILL, TO ACCESS THAT RESOURCE. AND SO AS A PRICE WILL INCREASE, THEY CAN TURN IT BACK ON AND REACH OUT FOR THAT INVENTORY, OR AS PRICES DECREASE IN THE WORLD MARKET, THEY CAN LEAVE IT ALONE, AND THE -- THERE ARE THREE PRIMARY DIFFERENT TYPES, DRY NATURAL GAS, WET GAS AND THERE'S OIL. WET GAS IS REALLY A MIX OR LIQUID THAT -- IT CAN BE LIQUIFIED NATURAL GAS OR A MIX OF GAS AND OIL. AND THOSE ARE TYPICALLY MORE PROFITABLE, ESPECIALLY IN TODAY'S MARKET. AM I DOING THAT RIGHT? DOES THAT ANSWER THE QUESTION? >> SURE. DRY GAS PARTICULARLY IS MUCH MORE OF A LOCAL PRODUCT, RIGHT? AND SO IT DEPENDS ON WHAT THE LOCAL CONDITIONS ARE, WITHIN THE REACH OF ITS TRANSPORTATION, RIGHT? WHEREAS OIL IS MORE EASY TO TRANSPORT INTERNATIONALLY. >> THERE IS A MUCH MORE DEFINED INFRASTRUCTURE FOR OIL AS OPPOSED TO LIQUID -- 36 OR NATURAL GAS. NATURAL GAS, AS YOU MENTIONED, IS MORE OF A LOCAL, REGIONAL, COMPARED TO OIL, WHICH IS A GLOBAL PRODUCT. >> ONE OF THE THINGS I'VE HEARD ABOUT, THE ADVENT OF ALL THIS VERY LOW COST NATURAL GAS IS THAT IT'S BRINGING MANUFACTURING OR HAS A POTENTIAL TO BRING MANUFACTURING BACK ON SHORE, VERSUS BEING OFF SHORED TO PLACES LIKE CHINA BECAUSE OF THE CHEAP LABOR, BUT THAT, IN FACT, WITH SO MUCH MANUFACTURING THAT IS ENERGY INTENSIVE AND NOT LABOR INTENSIVE, THAT THE CHEAP GAS CAN MEAN MORE MANUFACTURING BACK ON THE U.S. SIDE. HAVE YOU SEEN ANY OF THAT DEVELOPING IN ANY OF THESE MARKETS YET? >> OUTSIDE OF PITTSBURGH THERE, IS PLANS TO BRING NEW MANUFACTURING IN LINE. AS OF NOW THOSE PLANS HAVEN'T COME TO FRUITION BUT THAT'S SOMETHING WE'RE DEFINITELY KEEPING AN EYE ON. >> I'VE SEEN REPORTS, BUT NOTHING SUBSTANTIAL IN THE DATA YET. >> WHICH HOUSING MARKET HAS HAD THE BIGGEST IMPACT? OF THE ONES YOU ARE OUTLINING, WHICH ARE CURRENTLY HAVING THE MOST TROUBLE RIGHT NOW? I WOULD SAY WESTERN NORTH DAKOTA, WILLIAMS COUNTY, THE AREAS THAT I'M FAMILIAR WITH HAVE BEEN DRAMATICALLY IMPACTED BY THIS. >> THE AREAS I'VE COVERED, IT'S MAINLY A LOT OF RURAL AREAS, NOT PARTICULARLY ONE COUNTY, BUT JUST THEY HAVEN'T 37 -- OR THEY HAVEN'T EXPERIENCED THIS TYPE OF DEVELOPMENT BEFORE, AND THE EXISTING HOUSING STOCK, TO ACCOMMODATE -- THAT'S BEEN A SIGNIFICANT ISSUE FOR THEM. >> ONE MORE FOR ME. YOU WERE TALKING ABOUT THE STATISTICAL DIFFICULTY IN MEASURING -- TIM CAN YOU GIVE US AN EXAMPLE OF HOW THAT WORKS AND WHY IT'S A PROBLEM? >> YEAH, I GUESS LIKE THE BASIC EXAMPLE WOULD BE SOMEBODY WHO RESIDES IN OKLAHOMA AND THEN WOULD BE SHOVELED AROUND THE COUNTRY, WHILE THEIR COMPANY IS HEADQUARTER IN, SAY, HUGHES GENERAL OR SO, THEY WOULDN'T BE COUNTED IN POPULATION BY THE CENSUS, OR THEY MIGHT NOT SHOW UP IN THE BLS PAYROLL DATA. THANKS. ANY QUESTIONS FROM THE AUDIENCE? WOULD YOU COME TO THE MICROPHONE, PLEASE? >> I HAD A QUESTION ABOUT THE FIRST MARKET THAW DISCUSSED. YOU MENTIONED THAT THERE WAS A REGULATION, WHICH WAS A MORATORIUM ON TEMPORARY HOUSING. COULD YOU EXPLAIN SORT OF THE REASON BEHIND THAT DIDN'T SEEM TO BE THE BEST RESPONSE. >> THE FIRST AREA WAS IN THE BAKKEN REGION IN NORTH DAKOTA AND MONTANA, AND THE TEMPORARY HOUSING CAN AND MOST LIKELY INCLUDES WORK FORCE HOUSING AND IN MANY CASES, IT CAN BE AN INFRASTRUCTURE PROBLEM, BECAUSE THEY HAVE TO PUT THESE UNITS OUT IN THE MIDDLE OF NOWHERE, IN MANY CASES, AND SO -- AND THEN THERE'S 38 THE STRAIN ON THE INFRASTRUCTURE WHEN THESE PEOPLE MOVE INTO THESE WORK FORCE UNITS. AND SO IN SOME CASES, THIS IS NEW, AND SO THEY'RE TRYING TO BALANCE THIS IN THE BEST WAY THAT THEY CAN. >> I THINK IT'S WATER AND SEWAGE PROBLEMS, MOSTLY, RIGHT, BECAUSE THEY DON'T HAVE SEWAGE FACILITIES TO HANDLE 9000 ADDITIONAL HOUSING UNITS THAT CAN BE PUT UP VERY QUICKLY, RIGHT? YEAH. >> I'M CAITLYNN MILLER, I WORK IN THE VOUCHER OFFICE AND WE'VE DEFINITELY HEARD FROM THE FIELD ABOUT PROBLEMS THAT VETERANS HAVE BEEN FACING FINDING HOUSING, PARTICULARLY NORTH DAKOTA AND IN WESTERN PENNSYLVANIA, AND I'M WONDERING, THIS IS MORE I THINK KURT, FOR YOU, AND YOUR STAFF. IN TERMS OF YOU GUYS RECENTLY RELEASED THE FMRS FOR THIS YEAR, I THINK. >> RIGHT, IN AROUND OCTOBER 1ST. >> RIGHT. SO DID YOU HAPPEN TO LOOK AT SHIFTS IN THE FHRS, AND THESE AREAS? >> WELL, FMRS ARE A KIND OF A DIFFERENT -- THERE ARE OTHER ISSUES THERE IN TERMS OF MEASURING THINGS. WHEN THESE HOUSING MARKETS CHANGE VERY QUICKLY, IT'S HARD FOR THE DATA TO SHOW UP IN THE DATA SOURCES WE USE. BECAUSE THERE'S A DELAY IN COLLECTION. AND WHEN A MARKET CHANGES VERY RAPIDLY, AS CAN HAPPEN IN THESE VERY RURAL AREAS, THE DESIGN OF THE DATA IS TO 39 COLLECT IT OVER THE COURSE OF SEVERAL YEARS, AND WE'RE JUST BARELY SEEING THE EFFECT OF THIS IN A LOT OF MARKETS. THAT'S WHY WE DEVELOPED THE EMERGENCY PAYMENT STANDARD PROTOCOLS FOR HOUSING AUTHORITIES TO GO BEYOND THE USUAL REGULATORY CONSTRAINTS ON WHERE THEY CAN SET THE PAYMENT STANDARD RELATIVE TO THE FMR. BECAUSE WE RECOGNIZE THAT THERE'S NO WAY WE CAN ANALYZE DATA TO SUPPORT A PARTICULAR NUMBER FOR THE FMR, BUT THAT WE LET THE HOUSING AUTHORITIES WORK IT OUT THROUGH A PAYMENT STANDARD ADJUSTMENT. >> SO WHEN DO YOU EXPECT -- LIKE HOW LONG DOES IT TAKE FOR THE FMRS TO REFLECT -- >> WELL, DEPENDING UPON THE SIZE OF THE AREA, OUR PRIMARY DATA SOURCE IS THE AMERICAN COMMUNITY SURVEY, AND IT BREAKS DOWN AREAS INTO THREE SIZE CATEGORIES OVER WHICH THEY RELEASE DATA. SO ANY PLACE WITH 65,000 OR MORE PEOPLE, WE GET DATA EVERY YEAR. IF IT'S BETWEEN 20,065,000, WE CAN GET DATA ON A THREE-YEAR BASIS. IF IT'S BELOW 20,000, IT'S ONLY -- ONE SET, YOU GET DATA THAT'S ABROGATED OVER THE COURSE OF FIVE YEARS. SO IT GETS UPDATED EVERY YEAR BUT ONLY 1/5 OF THE OBSERVATIONS CHANGE IN THE DATA, IF YOU THINK OF IT THAT WAY. SO WE DON'T SEE -- AND MOST OF THE AREAS THAT ARE -- THE MOST DEEPLY IMPACTED ARE THESE SMALL COUNTIES BELOW 20,000. 40 >> THANK YOU. >> ALL RIGHT? WELL, I'D LIKE TO MOVE ON NOW AND HEAR FROM OUR REGIONAL ADMINISTRATORS AND FIELD OFFICE ADMINISTRATORS ABOUT WHAT'S GOING ON FROM THE HUD PROGRAM PERSPECTIVE AND WHAT THEY'RE SEEING THAT IS -- HOW THEY'RE WORKING WITH THE STATE AND LOCAL GOVERNMENTS IN THE AREAS THAT ARE AFFECTED BY THIS ACTIVITY AND RAPID CHANGE IN THE HOUSING MARKETS. WE HAVE -- FIRST WE'LL START WITH JANE VINCENT, WHO IS REGIONAL ADMINISTRATOR FOR REGION THREE, AND THE MARCELLUS SHALE IS HER -- PLUS UTICA, BECAUSE THEY'RE ONE ON TOP OF THE OTHER, AND THEN TOM LEACH OVER THE PHONE, THE FIELD OFFICE DIRECTOR IN THE COLUMBUS OFFICE, DEALING WITH THE UTICA SHALE ISSUES IN OHIO. THEN MARK BREZENA FROM REGION SIX AND HE'S GOT SEVERAL AREAS IN TEXAS, THE PERMIAN BASIN, EAGLE FORD SHALE, AND RICK GARCIA FROM REGION EIGHT. THEY'LL TALK INDIVIDUALLY ABOUT WHAT'S GOING ON IN THEIR AREAS AND WE'LL HAVE MORE ROUNDTABLE DISCUSSION. JANE, THANK YOU. I ALWAYS THINK IN A CONVERSATION LIKE THIS IT'S IMPORTANT TO GET THE BACKDROP OF THE ECONOMIC DATA WE'VE BEEN HEARING ABOUT. SO I REALLY APPRECIATE GETTING TO GET THIS OVERVIEW TO GIVE US CONTEXT AS WE MOVE FORWARD IN THE CONVERSATION. IN A PRACTICAL WAY, WHAT HAPPENS IN THE FIELD IS WHAT I WANTED TO SHARE WITH YOU. 41 WHEN I CAME ON BOARD, JUST ABOUT TWO YEARS AGO, IT WASN'T TOO LONG INTO THE TIME I GOT HERE THAT I WAS GETTING CALLS FROM SOME OF THE HOUSING ADVOCATES IN PENNSYLVANIA, SAYING THE HOUSING AUTHORITIES ARE HAVING A LOT OF TROUBLE WITH THEIR VOUCHERS. THE RESIDENTS WERE NOT ABLE TO FIND PLACES, THE PLACES THAT THEY -- THE LANDLORDS THEY HAD HERETOFORE BEEN WORKING WITH WERE NO LONGER RENTING TO THE VOUCHER HOLDERS, INSTEAD THEY HAD ALL OF THESE WORKERS COMING IN FROM OTHER PARTS OF THE COUNTRY TO WORK THE MARCELLUS SHALE PART OF THE REGION AND WHEN I TALKED TO OUR FOLKS, THEY SAID NO, WE'RE NOT HEARING ANYTHING ABOUT THAT, MAYBE IT WAS A QUIRK IN THE DATA, BUT THE DATA WAS SHOWING THAT IT WAS FINE AND THEY WERE GETTING NO COMPLAINTS, BUT REALLY, A CREDIT TO THE PUBLIC HOUSING STAFF, THEY STARTED MAKING A FEW CALLS TO THEIR EXECUTIVE DIRECTORS, AND THE EXECUTIVE DIRECTORS SAID YEAH, WE'RE HAVING TROUBLE HERE, AND WE NEED SOME HELP. SO WITH THAT, WE ACTUALLY STARTED WORKING IN PENNSYLVANIA WITH THE HOUSING ALLIANCE WHO HOSTED A SERIES OF CALLS THAT WE HAVE NOW BEEN ON ONCE A MONTH FOR ARE 18 MONTHS THAT HAS CONSISTED OF THE HOUSING ALLIANCE, ADVOCATES, PUBLIC HOUSING REPRESENTATIVES AND REALLY A FIELD WORKING GROUP OF US IN THE PHILADELPHIA REGIONAL OFFICE WITH EMAT INCLUDED, PUBLIC HOUSING, MULTI FAMILY, 42 FIELD POLICY AND MANAGEMENT, TO TRY TO TALK THROUGH AND IDENTIFY DO WE REALLY HAVE ISSUES, AND GEE, WHAT CAN WE BE DOING ABOUT THEM, SO SOME OF THE THINGS YOU HEARD ABOUT HERE ARE VERY HAPPILY A RESULT OF WHAT HAS COME OUT. FOR INSTANCE, THE EMERGENCY STANDARD PAYMENT BEING APPROVED IN SUSQUEHANNA COUNTY AND BRADFORD TIOGA, SO THAT'S A GOOD THING. IN THE MEANTIME WE'VE DISCOVERED A FEW OTHER ISSUES THAT ARE OUT THERE, JUST IN TERMS OF PRACTICAL DAY TO DAY WORK OUT IN THE FIELD, I GUESS YOU CAN SAY, THAT HAS COME UP. ONE IS, IN THE PAST YEAR, WE PARTICIPATED IN A FEDERAL CONFERENCE ON MARCELLUS SHALE, WE HAD SOMEONE FROM THE PHILADELPHIA OFFICE WHO PARTICIPATED AND IT INCLUDED LOTS OF REPRESENTATIVES FROM OTHER FEDERAL AGENCIES, BUT THESE WERE THE SCIENCE-RELATED AGENCIES, IF YOU WILL, AND WHILE WE WERE LOOKING AT BOOM-BUST PHILOSOPHY AND HOUSING MARKETS, AND COULD WE REALLY FIND WAYS TO HOUSE THE LOWEST INCOME AMONG US, WHOM WE ARE CHARGED WITH HELPING, THE PEOPLE AT THE CONFERENCE WERE JUST AMAZED THAT THERE WERE ANY ABOVE GROUND ISSUES AND THEY WERE JUST LOOKING BELOW GROUND, SO THAT WAS A REVELATION TO US AND I THINK TO THEM AS WELL, THAT THIS WAS MORE THAN JUST A SCIENCE EXPERIENCE IF YOU WILL, BUT INDEED, THE BOOM-BUST AND THE SCIENCE EXPERIMENT REALLY SURFACES ITSELF IN SOME WAYS AT THE LOCAL AND STATE 43 GOVERNMENT OR POLITICAL LEVEL, IF YOU WILL, SO A THOUGHT ABOUT THAT IS THE STATE OF PENNSYLVANIA IS VERY EXCITED ABOUT ALL THIS WORK GOING ON IN PENNSYLVANIA. LOTS OF NEW JOBS, MORE REVENUES COMING INTO THE STATE. THIS IS A PRETTY GOOD THING IN A TOUGH ECONOMIC TIME, THAT ALL THESE ADDITIONAL REVENUES ARE COMING IN TO THE STATE. BUT, ON THE DOWNSTREAM, THE GOVERNOR OF DELAWARE IS NONE TOO HAPPY ABOUT THIS BECAUSE OF THE POTENTIAL ISSUES WITH DRINKING WATER, DOWNSTREAM DRINKING WATER ISSUES. SO THAT IS AN ABOVE GROUND AND BELOW GROUND ISSUE, BUT AFFECTING DIFFERENT STATES IN DIFFERENT WAYS, AND IF ANY OF YOU HAVE FOLLOWED SOME OF THE LOCAL NEWSPAPERS, THERE'S ACTUALLY BEEN A BIT OF VERBAL TUG-OF-WAR BETWEEN THE TWO-STATE GOVERNMENTS, WHICH HAS BEEN PRETTY ENTERTAINING TO WATCH PLAY OUT IN THE PAPER. SO THAT IS I THINK A REAL INDICATOR OF JUST THE PUSH-PULL ISSUES THAT YOU GET IN NEIGHBORING STATES AND IN NEIGHBORING AREAS THAT ARE EITHER BENEFITING FROM THE ECONOMICS OR HURTING FROM SOME OF THE POTENTIAL ENVIRONMENTAL FALLOUT. OTHER THINGS THAT WE HAVE DISCOVERED IS, AS WE WERE TALKING ABOUT WHAT IS THE EFFECT OF RENTS IN THE AREA, A LITTLE BIT TOO SOON TO TELL, BUT I CAN TELL YOU THAT IN WEST VIRGINIA, SOME OF OUR RURAL HOUSING AUTHORITIES HAVE SAID WOW, OUR FMRS WENT 44 UP BY $100 A MONTH OR SEVERAL HUNDRED DOLLARS A MONTH, WHEREAS IN PENNSYLVANIA, WHICH HAS BEEN HAVING DIFFICULTY HOUSING ITS FAMILIES, THE FAIR MARKET RENTS HAVE DECREASED, AND MADE IT A LITTLE BIT MORE CHALLENGING, INDEED, TO FIND HOUSING. ANOTHER ONE OF THE ISSUES FROM A LANDLORD ISSUE, AND WE DO EVEN WONDER IF THIS IS A BIT OF A FAIR HOUSING ISSUE, IS THAT LANDLORDS HAVE SEEN THAT, YEP, I CAN RAISE MY RENTS, I CAN START RENTING TO FOLKS WHO ARE ESSENTIALLY TEMPORARY WORKERS, MAYBE A COUPLE OF WORKERS WHO ARE DOUBLING UP AND BRINGING SOME RELOCATION MONEY TO THE TABLE FROM THE COMPANIES THAT ARE HIRING THEM, AND THEY'VE DECIDED TO NO LONGER RENT TO FAMILIES. SO THAT'S A PRETTY SERIOUS ISSUE FROM OUR PERSPECTIVE. IN THE MIDST OF ALL THIS, WHAT WE'VE TRIED TO DO IS HELP MOVE ALONG A LITTLE BIT OF THE DATA SO THAT WE CAN REALLY ANALYZE WHAT'S HAPPENING WITH RENTS AND OCCUPANCY. SO WE PARTNERED WITH THE REINVESTMENT FUND WHICH IS A NONPROFIT ORGANIZATION HEADQUARTERED IN PHILADELPHIA, AS WELL AS THE HOUSING ALLIANCE IN PENNSYLVANIA TO TRY TO GET MORE EXPERIENCE FROM HOUSING AUTHORITIES IN THE MARCELLUS SHALE AREA, SO THIS CROSSES STATE BOUNDARIES AND TIM YOU PROBABLY KNOW WHOM WE SURVEYED, BUT DEFINITELY, PENNSYLVANIA AND WEST VIRGINIA, AND MAYBE INTO NEW 45 YORK, AS WELL. UNFORTUNATELY, THE RESULTS HAVE NOT COME BACK AS STRONG AS WE'D LIKE, SO WE CAN'T REALLY TAKE ADVANTAGE OF DATA THAT WE'VE GOTTEN FROM THAT, THUS FAR. BUT THAT IS A LITTLE BIT OF WHERE WE ARE, TRYING TO NOW HELP THE HOUSING ALLIANCE AS THE LEAD, WHICH IS GREAT, THAT WE HAVE A NONPROFIT LEAD ON THIS, BOTH INTERNAL AND EXTERNAL WORKING GROUP, AS WELL AS HOUSING AUTHORITIES, AND THEN US FROM ACROSS THE PROGRAM AREAS IN PHILADELPHIA REGIONAL OFFICE TO SEE WHAT OTHER TECHNIQUES WE MIGHT BE ABLE TO GO AFTER. SOME OF THE THINGS WE ARE LOOKING AT IS APPROACHING THE COMPANIES THEMSELVES AND SAYING IT'S PROBABLY TIME FOR YOU ALL TO CHIP IN AND HELP US FIND SOME TEMPORARY HOUSING SO THAT WE CAN PUT RELIEF ON THE LOCAL HOUSING MARKETS. >> ALL RIGHT THANK YOU JANE. TOM, ARE YOU ON THE PHONE? >> GOOD AFTERNOON, THIS IS TOM LEACH. I'M NOT HEARING THIS TOO WELL BUT I WILL JUST CONTINUE. WE SHOULD BE ON THE FIRST SLIDE, PLEASE. THERE'S BEEN MUCH INFORMATION AND MISINFORMATION ON OUR AREA ON THE ISSUE. AND OUR FOCUS IN OHIO AND REGION FIVE HAS BEEN TO BRING TOGETHER FEDERAL, STATE AND LOCAL STAKEHOLDERS, AND ADVOCACY GROUPS TO ADDRESS NOT EVERY ISSUE BUT A WELL DEFINED ISSUE, THE IMPACT OF THE GROWTH OF DRILLING ON THE AVAILABILITY OF AFFORDABLE HOUSING IN THE IMPACTED 46 AREAS. AND PD & R HAS DONE AN AWESOME JOB OF SHOWING THE BIG PICTURE. BUT OUT IN THE FIELD, WE FOCUS ON THE STATE AND LOCAL IMPACTS. OUR GOAL HAS BEEN TO ENGAGE OUR PARTNERS AND STAKEHOLDERS IN A PLACE-BASED WAY THAT HELPS BRING CLARITY TO THE ISSUE AND WITH THE USE OF VISIBLE TOOLS SUCH AS GIS, IS WHICH IS AUTHORITATIVE, UP TO DATE DATA, IT'S MUCH EASIER TO SEE. NEXT SLIDE, PLEASE. GROWTH OF DRILLING IS STILL SMALL IN COMPARISON WITH NORTH DAKOTA, PENNSYLVANIA, AND OTHER PARTS OF THE UNITED STATES. BUT THE GROWTH IS NOT UNIFORM IN OHIO. NEXT SLIDE, PLEASE. >> ALL THE ORANGE DOTS, IS THAT THE ONE OR THIS ONE? >> THAT'S GOOD. >> OKAY. >> BIG GROWTH IN OHIO. NEXT SLIDE, PLEASE. UNFORTUNATELY, THE GROWTH IS NOT UNIFORM. AND THERE ARE AREAS SUCH AS CARROLL COUNTY, OHIO, WHICH IS RURAL, IS EXPERIENCING A HUGE GROWTH IN DRILLING, AND THEY ARE VERY LIMITED IN THEIR RESOURCES. NEXT SLIDE, PLEASE. I DO WANT TO MENTION THAT THIS IS A TOOL THAT WE USE WITH OUR STAKEHOLDERS, CALLED GOT IT, WHICH IS THE GIS OPERATIONAL TOOL, INTEGRATING TECHNOLOGIES. BUT WE'RE ALSO VERY THANKFUL AND APPRECIATIVE OF ALL THE WORK THAT PD & R DOES ON THIS TOPIC, INCLUDING ROB RENNER 47 IN GIS. LOOKING AT THESE KEY IMPACTS, THIS IS BASICALLY WHAT WE'VE TALKED ABOUT ALREADY. THE IMPACT ON HOUSING CHOICE VOUCHER UNITS, LOSSES, THE IMPACT ON PUBLIC HOUSING AND PROJECT-BASED SECTION EIGHT, SINGLE FAMILY REO, OR LACK THERE OF, PAYMENT OF RENTAL ASSISTANCE THAT CAN HELP PEOPLE, BUT WE CAN SERVE FEWER AND DISPLACED MARKET RENTER, PEOPLE THAT ARE ALREADY WORKING, AND CAN AFFORD THE RENTS BUT ARE BEING DISPLACED. NEXT SLIDE. >> THERE'S A NUMBER OF THINGS THAT WE CAN DO TO STAY AHEAD OF THE CURVE ON THIS. AND ONE IS TO ENGAGE OUR PARTNERS. AND WE'VE HOSTED IN OHIO DOUG SHELDON IN CLEVELAND, MYSELF, JIM CUNNINGHAM IN CINCINNATI, HAVE HOSTED A COUPLE OF AFFORDABLE HOUSING FORUMS, AND INCLUDED OTHER FIELD OFFICES, AND APPRECIATE THE SUPPORT FROM MS. VINCENT IN PHILADELPHIA, PITTSBURGH, LUBBOCK, FORT WORTH, HELENA, ALBUQUERQUE AND OF COURSE HEADQUARTERS, BUT WE'RE ALSO ENGAGING WITH THE OHIO DEPARTMENT OF DEVELOPMENT, THE OHIO FINANCE AGENCY, DEPARTMENT OF COMMERCE, THE STATE UNIVERSITY, OHIO UNIVERSITY, OHIO DEPARTMENT OF NATURAL RESOURCES, AND OTHER FEDERAL PARTNERS LIKE THE USGA AND DEPARTMENT OF COMMERCE. WE'VE BEEN WORKING WITH OUR PUBLIC HOUSING AUTHORITIES, THE OHIO CAPITAL CORPORATION FOR HOUSING, THE COALITION ON HOUSING AND HOMELESSNESS IN 48 OHIO, THE OHIO POVERTY LAW CENTER AND ENGAGING OUR ELECTED OFFICIALS ON A STAFF LEVEL. SO THE MAIN THING IS WE WANT TO GET PEOPLE TO WORK TOGETHER. NEXT SLIDE, PLEASE. THE TOOL THAT I'M USING IS THE HUD'S GOT IT GIS TOOL BECAUSE IT'S VERY VISUAL, AND PEOPLE CAN SEE CLEARLY NOT ONLY WHERE THE DRILLING IS, BUT THE PROXIMITY TO OTHER HOUSING. NEXT SLIDE. BASICALLY, THE VALUE OF WHAT WE'RE DOING IN OHIO AND IN REGION FIVE IS OF THE FORUMS AND ONGOING COLLABORATION AND COMMUNICATION. IT'S PRETTY CLEAR. HUD HOSTS AND LEADS THESE MULTI-STATE INNERAGENCY PUBLIC-PRIVATE LISTENING FORUMS AND WE LEARN FROM EACH OTHER. HUD IS SEEN AS BEING ENGAGED AND AN ISSUE LEADER, HUD PROVIDES OUTREACH ON KEY ISSUES TO NOT ONLY DISSEMINATE INFORMATION BUT ALSO SENSITIZE OUR PARTNERS TO THE ISSUES. HUD ALSO PROVIDES THE ADVANCED GIS TOOLS TO HELP OUR PARTNERS GET A BETTER PLACE BASED FOCUS AND HUD CAN BETTER LEVERAGE THE RESOURCES OF OUR PARTNERS TO MEET THESE GOALS, AND WE CAN ACCOMPLISH MUCH MORE WHEN WE ALL WORK TOGETHER. THANK YOU. >> ALL RIGHT THANK YOU TOM. NEXT, WE'D LIKE TO HEAR FROM MARK BRAZENA FROM REGION SIX, FORT WORTH. >> I WANT TO TALK ABOUT THREE DIFFERENT AREAS THAT WE HAVE, 49 SOUTH TEXAS. ORIGINALLY, IT WAS A SHORT TERM, BUT LATER ON, THEY FOUND THAT THERE WAS MORE OIL THERE, SO IT'S REALLY KIND OF CHANGED THE DYNAMICS OF THE THING. ORIGINALLY WHEN THEY FIRST STARTED THERE WAS KIND OF A RURAL AREA, THERE WAS NO HOUSING. IT'S STILL -- IT'S A VERY TIGHT HOUSING MARKET. THERE'S BEEN A SIGNIFICANT IMPACT BUT MOST OF THE PEOPLE THAT COME IN THERE ARE TEMPORARY WORKERS. WE HAVE A LOT OF THOSE, A LOT OF SUBCONTRACTOR, WE HAVE A LOT OF PEOPLE THAT COME IN THERE FOR THREE WEEKS AT A TIME AND GO HOME AND REST AND COME BACK. THEY'RE NOT BRINGING THEIR KIDS MUCH INTO THE AREA. AND NOT A WHOLE LOT OF FAMILIES ARE MOVING IN. THERE HAS BEEN A SIGNIFICANT IMPACT ALL OVER SOUTH TEXAS IN THE HOUSING MARKET. OF COURSE, SECTION EIGHT VOUCHERS LIKE WHAT YOU TALKED ABOUT ARE BEGINNING TO HURT. THEY'RE FINDING IT A VERY TIGHT MARKET, NO OR LITTLE SUPPLY. ONE OF THE MOST DIFFICULT THINGS THAT WE'VE HAD THERE IS THERE IS NO SUSTAINABLE 30-YEAR MORTGAGE HOUSING THAT YOU CAN GET TO A LARGE DEGREE, BECAUSE MANY OF THE HOUSING THAT THEY WANT TO DO IS SET UP AS TEMPORARY-TYPE HOUSING, AND YOU PROBABLY WOULDN'T BE ABLE TO GET AN FHA LOAN OUT OF IT. BUT THE SUPPORT SERVICES, FOOD, AUTOMOBILES, ENTERTAINMENT, AND RETAIL HAS 50 GONE THROUGH THE ROOF IN THIS AREA. AND SO IT'S A VERY -- THEY NEED A LOT OF MOTELS AND HOTELS AND RVS, AND ANYTHING THEY CAN GET THEIR HANDS ON. SO THEY THOUGHT IT TO BE A SHORT TERM PROBLEM, AND NOW IT'S TURNED INTO A LONGER TERM PROBLEM, BECAUSE THERE'S MORE OIL THAT'S BEEN DISCOVERED THERE. MIDLAND, ODESSA, IT'S A LITTLE D IT IS AN OLD OIL TOWN, AND IT'S SEEN A LOT OF BOONS AND BUSTS UP AND DOWN, AND THEY HAVE SOME OF THE HIGHEST RESERVES IN THE 48 STATES, EVEN THOUGH IT'S A MATURE OIL AREA. THE IMPACT THERE HAS BEEN THAT A TIGHT HOUSING MARKET, BUT THEY'VE GOT A PRETTY GOOD HOUSING STOCK, BUT THERE'S VERY HIGH RENTAL PRICES THERE. THEY ARE PROVIDING FHA RENTAL HOUSING, 221D4S, AND IT'S A STRONG MARKET. SO THAT SEEMS TO BE DOING PRETTY WELL THERE, EVEN THOUGH THERE ARE HIGH PRICES. SOME FAMILIES ARE MOVING IN THERE. BARNETT, IN THE FORT WORTH-DALLAS AREA, IS SIGNIFICANT, AND THERE ARE THREE REALLY DIFFERENT, COMPLETELY WAYS OF OF IT BEING HANDLED. YOU'VE GOT THE RURAL MARKET THAT IS REALLY IN BAD SHAPE AND NEEDS A LOT OF HOUSING, YOU HAVE THE MIDLAND ODESSA AREA, PART OF THE PERMIAN BASIN WHICH HAS GOT ENOUGH HOUSING RIGHT AT IT BUT THE MARKET IS VERY TIGHT, THEN YOU GO TO FORT WORTH-DALLAS AND THEY'RE DOING A LOT OF 51 DRILLING AND THINGS THAT ARE GOING ALONG BUT IT'S NOT AFFECTING THE MARKET AT ALL AND THE REASON WHY, YOU'VE GOT A HUGE MARKET THERE, SO IT REALLY HASN'T HAD A REAL IMPACT. NOTHING SIGNIFICANT BECAUSE OF ITS SIZE. SO THOSE ARE THE THREE THINGS I WANT TO TALK ABOUT, BECAUSE I THINK MOST EVERYBODY HAS HIT THE OTHER SUBJECTS. BUT WE DO HAVE THREE. ONE THING I'D LIKE TO MENTION IS CLOVIS, NEW MEXICO IS GETTING HIT PRETTY GOOD RIGHT NOW AND THEY'RE MOVING IN A BUNCH OF METAL CONTAINERS AND USING THEM AS HOUSING. SO I'VE JUST LEARNED ABOUT THAT RECENTLY. >> RICK GARCIA, REGION EIGHT. >> THANK YOU KURT. LET ME ACKNOWLEDGE AND THANK YOU KURT AND JEAN IN PD & R FOR THINKING ABOUT INCLUDING THE REGIONAL ADMINISTRATORS IN THIS PANEL. IT'S A UNIQUE OPPORTUNITY FOR US TO BRING A LOCAL PERSPECTIVE, ALTHOUGH WE MAY NOT ALL PHYSICALLY BE IN THESE BASINS, OIL SHALE BASINS OR GAS BASINS, LITERALLY EVERY SINGLE DAY WE DO HAVE PEOPLE THAT ARE AND WE DO COMMUNICATE WITH THOSE FOLKS ON A REGULAR BASIS, SO IT'S GREAT TO BE ABLE TO PARTICIPATE. A LOT OF WHAT HAS ALREADY BEEN SHARED ABOUT PROGRAMS AND FUNCTIONS, I'M NOT GOING TO REPEAT THOSE THINGS. I MIGHT ALLUDE TO THEM BY MY COLLEAGUES AND ALSO BY THE TWO ECONOMISTS' PRESENTATIONS. BUT LET ME JUST GIVE YOU AN 52 OVERARCHING PERSPECTIVE OF SOME OF THE BIGGER THEMES I MIGHT SEE THAT ARE OCCURRING IN THE ROCKY MOUNTAIN WEST, AND SPECIFICALLY, IN THE BAKKEN SHALE FORMATION. THERE'S NO QUESTION THAT THE REGION EIGHT STATES HAVE A STRONG ORIENTATION TOWARDS OIL AND GAS EXPLORATION PRODUCTION. THEY HAVE HISTORICALLY. AS SAM INDICATED, WE HAVE A HISTORY OF BOOM AND BUST IN ENERGY ECONOMY IN THE MOUNTAIN WEST. THE GOOD NEWS IS, AND ALTHOUGH I'M NOT TRYING TO MAKE A PREDICTION HERE, BUT AT LEAST THE ECONOMISTS AND OTHER ELECTED OFFICIALS BELIEVE THAT THIS PARTICULAR OIL AND GAS SHALE PERMITTING PERIOD THAT WE'RE EXPERIENCING IN THE BAKKEN IS HERE TO STAY AND HERE TO STAY FOR A LONGER PERIOD OF TIME THAN WE'VE SEEN IN THE PAST. WITH THAT UNDERSTANDING GOING FORWARD, I THINK OUR WORK IN THE HOUSING AND DEVELOPMENT ARENA MEANS WE NEED TO TAKE A LONGER TERM VIEW OF THE KIND OF ASSISTANCE AND RESOURCES WE'RE MAKING AVAILABLE. YES, THERE'S AN IMMEDIATE NEED AND SENSE OF URGENCY IF YOU'RE ON THE GROUND LIVING IN THESE COMMUNITIES AND THE KINDS THAT RESPONSES THAT HAVE ALREADY BEEN SHARED, EMERGENCY STANDARD PAYMENT INCREASES, HOUSING FORUMS, EDUCATION, COLLABORATION, WITH STATE AND LOCAL GOVERNMENTS, ARE ALL THE KINDS OF RESPONSES AND RESOURCES THAT ARE WE ARE MAKING AVAILABLE AS WELL, BUT AT THE SAME TIME, THERE IS A 53 NEED FOR LOCAL GOVERNMENTS MOSTLY IN THEIR LOCAL CAPACITY TO RUN LOCAL GOVERNMENTS, MANY OF THESE COMMUNITIES ARE BEING IMPACTED IN THE BAKKEN REGION. FRANKLY, SOME DON'T EVEN HAVE ZONING CODES AVAILABLE. THIS IS SOMETHING THAT THEY REALLY HAVEN'T HAD TO FACE IN THE PAST. FROM THAT PERSPECTIVE, I THINK THERE'S A NEED FOR MANY OF THE TYPICAL COORDINATION FUNCTIONS THAT MOST OF US TAKE FOR GRANTED OCCUR IN LOCAL GOVERNMENTS LIKE FINANCE BUDGET, PLANNING, ZONING, PERMITTING, INFRASTRUCTURE, PLANNING AND DEVELOPMENT, COMMUNITY, ECONOMIC DEVELOPMENT, EVEN BASIC HOUSING DEVELOPMENT, SERVICE, COMMERCE, EDUCATION. WE NEED TO HELP THOSE LOCAL GOVERNMENTS UNDERSTAND THE REVENUES THAT THEY'RE GENERATING, GOING BACK TO THOSE LOCAL COFFERS AND LOCAL BOTTOMS, NEED TO BE THOUGHT THROUGH ON A LONGER TERM BASIS, SO WHEN THEY COME TO HUD, PRIMARILY BECAUSE WE'RE THE H IN HUD, AND THERE IS THAT EXPECTATION THAT WE HAVE RESOURCES OR KNOW HOW TO DO THESE THINGS. THE LONGER TERM VIEW, IN ADDITION, IS THE -- HOW WE CAN ADDRESS THE LONG TERM AFFORDABLE HOUSING THROUGH VARIOUS MEANS. ONE OF THE UNIQUE ELEMENTS IN THE BAKKEN REGION IS THE CITY OF MINOT. TWO SUMMERS AGO, IT WAS IMPACTED DIRECTLY BY A MAJOR FLOOD, WHICH ELIMINATED 25 PERCENT OF THE HOUSING 54 INVENTORY IN THAT COMMUNITY. MINOT IS PHYSICALLY ON THE EDGE, THE EASTERN EDGE, OF THE BAKKEN SHALE. I THINK IT'S SAFE TO SAY THAT THE BAKKEN SHALE ACTIVITY IS NOT ONLY IMPACTING EASTERN MONTANA, WHERE SOME OF THE DEVELOPMENT IS OCCURING, NOT QUITE AS RAPIDLY, BUT I THINK IT'S EASY TO SAY THAT IT'S IMPACTING THE ENTIRE STATE. PEOPLE, FRANKLY, ARE LIVING AS FAR AWAY AS BISMARCK ON THE EASTERN END OF THE STATE AND FINDING WAYS TO COMMUTE TO THE OIL AND GAS SITES. THE FORUMS THAT I'VE PARTICIPATED IN DIRECTLY, AND MEMBERS OF THE FIELD OFFICE STAFF, BOTH IN NORTH DAKOTA AND IN EASTERN MONTANA, HAVE INCLUDED WORK FORCE DEVELOPMENT COLLABORATION WITH LOCAL AND COMMUNITY COLLEGES, PROVIDING TECHNICAL TRAINING AND ASSISTANCE FOR THE INDUSTRIES THAT ARE LOOKING FOR LABOR. THE BIGGEST CHALLENGE THAT THOSE ENERGY COMPANIES HAVE IS MAINTAINING LABOR. OBVIOUSLY, IF SOMEONE CAN BE ATTRACTED FROM A FAST-FOOD RESTAURANT AT THE WAGES THAT ARE BEING PAID BY THE OIL AND GAS INDUSTRY, THEY'RE GOING TO DO THAT, BUT THOSE INDIVIDUALS NEED THE TRAINING. AND THAT MIGHT BE THE BETTER WAY, IF THEY ALREADY LIVE THERE AND HAVE A HOME, TO BUILD A LOCAL LABOR FORCE, BUT THE FOLKS COMING IN AND LEAVING OVER A PERIOD OF SHIFTS, WHICH I THINK THEY GO MAYBE 15 -- 10-15 DAYS, THEN THEY'RE OFF FOR A WEEK AND COME BACK, A LOT OF THOSE 55 FOLKS ARE FRANKLY JUST LIVING IN TEMPORARY WORK FORCE HOUSING. BUT IT'S HAVING THE KIND OF IMPACT ON THE LOCAL COMMUNITY THAT BOTH MY COLLEAGUES HAVE ALREADY EXPRESSED. ONE OF THE OTHER UNIQUE ELEMENTS THAT I'LL ADD TO THE BAKKEN REGION IS THAT HUD, THROUGH OUR OFFICES, SUSTAINABLE HOUSING COMMUNITIES, DID AWARD A $1.5 MILLION REGIONAL SUSTAINABLE PLANNING GRANT TO A REGIONAL PLANNING ENTITY IN WESTERN NORTH DAKOTA WHICH ACTUALLY HAS TAKEN ON THE WORK OF 19 COUNTIES THAT ARE ENGAGED DIRECTLY IN TRYING TO DO A BETTER JOB OF WHAT THE IMPACT TO OIL AND GAS ECONOMY, THE NEW ENERGY ECONOMY, IS GOING TO BE HAVING IN THAT AREA. SO THERE IS AT LEAST A GROUP THAT'S NEUTRAL. IT'S NOT DRIVEN BY THE OIL AND GAS COMMUNITY. IT'S EXCLUSIVELY BEING DRIVEN BY LOCAL GOVERNMENTS AND ELECTED LEADERS. IT'S A NEUTRAL GROUP OF 19 COUNTIES THAT'S TRYING TO DO A BETTER JOB OF THINKING THROUGH THE LONG TERM IMPACTS. AND I THINK THAT'S WHERE AGENCIES LIKE HUD CAN PROBABLY HAVE AN OPPORTUNITY NOT JUST TO TRY TO ADDRESS THESE ISSUES ON AN IMMEDIATE BASIS, WHICH WE'RE DOING, BUT TO ALSO HELP THOSE COMMUNITIES THINK THROUGH THEIR LONGER TERM SUSTAINABLE COMMUNITY DEVELOPMENT, AND PROVIDE THE TRAINING AND THE EDUCATION AND THOSE KINDS OF LINKAGES. 56 IF I COULD GO AHEAD, ONE SLIDE IS REALLY -- IT'S A WRAP-UP SLIDE. SAM HAD THIS IN HIS -- I JUST WANTED TO SHARE THIS WITH YOU. MARK WAS TALKING ABOUT THE CONTAINERS. THIS IS A $25,000 LIVING UNIT THAT'S ON SALE BY WALMART IN WESTERN NORTH DAKOTA. THAT IS A HOUSING -- OR A SHELTER ALTERNATIVE TO FOLKS IN NEED OF HOUSING. AND THEY HAVE THESE AVAILABLE ON THEIR PARKING LOT. AND AS I SAID, YOU CAN PICK IT UP. THOSE ARE TWO BUNKS THERE ON THE RIGHT SIDE, SOME KIND OF LAVATORY IN THE BACK, WITH SOME MODEST KIND OF GALLEY KITCHEN SERVICES. BUT THIS IS ONE ALTERNATIVE THAT SOMEBODY CREATIVE AND TRYING TO CAPITALIZE ON THE OPPORTUNITIES OF LIMITED SUPPLY OF HOUSING IS BRINGING TO THE MARKETPLACE. SO WE ASK THE QUESTION, IS THIS WHERE WE WANT HOUSING TO GO IN THIS PART OF THE COUNTRY, AND I THINK WE ALL KNOW THE ANSWER TO THAT. >> ALL RIGHT, THANK YOU. TO START A LITTLE BIT OF THE DISCUSSION, YOU TALK ABOUT THE IMMEDIATE NEED VERSUS THE LONG TERM VIEW. CAN YOU GUYS WHO HAVE BEEN LOOKING AT THE INDUSTRY TELL US A LITTLE BIT ABOUT THE DIFFERENCE IN THE EMPLOYMENT AND ACTIVITY LEVELS BETWEEN THE EXPLORATION PHASE AND THE LONG TERM PRODUCTION PHASE, AND WHAT -- HAS THE INDUSTRY BEEN ABLE TO TELL YOU ANYTHING OR ARE THEY KIND OF KEEPING THE SECRETS CLOSE TO 57 THE VEST? THAT'S A BIG ISSUE, WHEN THIS IMMEDIATE NEED IS ENORMOUS AND VERY PRESSING, BUT IS IT -- YOU KNOW, HOW LONG IS IT GOING TO LAST AT THE LEVELS THAT YOU SEE INITIALLY WHEN THERE'S EXPLORATION ACTIVITY? ONE OF THE FIRST QUESTIONS THAT WE ASKED AS A TASK FORCE IS TO SEE IF WE COULD FIGURE OUT IF THERE WAS A NUMBER, AN AVERAGE CREW SIZE FOR A DRILLING RIG. AND UNFORTUNATELY THERE ISN'T AN AVERAGE BECAUSE IT VARIES SIGNIFICANTLY BUT THE EMPLOYMENT BUMP COMES IN THE DRILLING AND EXPLORATION PHASE, AND ONCE THE WELL MOVES TO PRODUCTION, IT'S A MAINTENANCE PHASE AT THAT POINT. THE TANKS ARE FILLED, THE TRUCK COMES IN, LOADS UP, AND LEAVES. AND SO AT THAT POINT, IT'S A MUCH LOWER NEED FOR LONG TERM EMPLOYMENT. BUT THOSE, THE DRILLING CREW CAN MOVE TO OTHER DRILLING AREAS. >> ONE POINT I'D LIKE TO MAKE SEAR, THERE'S ALSO THE POSSIBILITY OF THE OIL PRICES GOING DOWN. IF THE OIL PRICES GO DOWN, WE WON'T HAVE A BOOM, AND IT COULD CERTAINLY AFFECT ANYTHING THAT COULD HAPPEN. THAT COULD HAPPEN AT ANY TIME. WE DON'T KNOW WHAT THE MARKET IS GOING TO DO. >> WE'VE SEEN IT IN GAS, PRIMARILY THE AREAS WHERE -- WHERE THE EXPLORATION ACTIVITY HAS FALLEN WAY OFF. THEY'RE SORT OF AT THE LEVEL OF PRODUCTION THEY'LL 58 CONTINUE TO PRODUCE BUT THEY'RE NOT SINKING ANY MORE NEW COSTS IN UNTIL THEY SEE THE PRICES GO HIGHER AGAIN. CAN YOU TALK A LITTLE BIT MORE ABOUT SOME OF THE INFRASTRUCTURE CHALLENGES THAT YOU'RE SEEING IN THE LOCAL AREA THAT YOU'RE HELPING THEM DEAL WITH? >> SURE. WHAT YOU ALLUDED TO A COUPLE OF MOMENTS AGO, JUST THE BASIC WATER AND SEWER KINDS OF INFRASTRUCTURE NEEDS THAT MOST OF THESE SMALLER COMMUNITIES, ONE, DON'T HAVE THE LOCAL CAPACITY TO DESIGN, AND PUT THIS KIND OF INFRASTRUCTURE IN PLACE. THAT IMPEDES, DOESN'T NECESSARILY PREVENT BUT IT CAN IMPEDE THE PRIVATE DEVELOPMENT FROM COMING IN. THERE WAS A MAJOR PRIVATE HOUSING MARKET CONFERENCE EARLIER THIS YEAR HELD IN WILLISTON, AND ATTRACTED NATIONAL HOUSING MARKET DEVELOPERS, AND REGIONAL ONES AS WELL, BUT THAT WAS THE BIGGEST ISSUE THAT WAS SHARED AT THAT CONFERENCE IN WILLISTON, IS WHEN CAN WE HAVE EXPECTATIONS OF WHEN THE INFRASTRUCTURE NEEDS FOR BASIC WATER AND SEWER INCREASES, WHO'S GOING TO FUND IT, HOW IS IT GOING TO GET FINANCED, AND ARE THEY GOING TO BE MADE AVAILABLE. I THINK THERE ARE GROUPS READY TO MOVE IN AND CAPITALIZE THIS ON A REGULAR MARKET BASIS. OUR ROLE AS I SEE IT IS TO HELP PRESERVE THE AFFORDABLE HOUSING INVENTORY. THAT'S FIRST AND FOREMOST. BEFORE THAT GETS COMPLETELY 59 GOBBLED UP JUST THROUGH THE NORMAL DEMAND THAT'S BEING PUT ON HOUSING. SO I THINK THAT'S PROBABLY ONE OF THE BIGGEST CHALLENGES AND IT'S ONE OF THE ONES THAT'S PROBABLY GOING TO TAKE THE LONGEST PERIOD OF TIME TO ACTUALLY GET THOSE KINDS OF PROCESSES IN PLACE, WHERE THERE'S CONFIDENCE THAT THE PRIVATE BUILDING COMMUNITY HAS THAT THERE IS GOING TO BE THAT KIND OF INFRASTRUCTURE. >> JEAN? >> I'D LIKE TO SORT OF CHIME IN ON THAT A LITTLE BIT. ONE OF THE CHALLENGES WITH THE INFRASTRUCTURE IS TRYING TO FORESEE THE FUTURE, AND WHETHER OR NOT THIS IS JUST A SHORT TERM ISSUE OR WHETHER THE LOCAL GOVERNMENTS NEED TO BE PROVIDING INCREASED INFRASTRUCTURE OR NEW SCHOOLS OR WHATEVER, DEPENDING UPON IF THERE'S GOING TO BE ADDITIONAL FOLKS MOVING INTO THE AREA, AND AS YOU WERE SHARING, THAT MAY HAPPEN IN THE SHORT TERM, AND THOSE ARE OFTEN TEMPORARY WORKERS, AND THEY DON'T BRING THEIR FAMILIAR LEE, BUT CAN YOU REALLY BANK ON THEM IN TERMS OF SUPPORTING THE INFRASTRUCTURE, THE LONG TERM INFRASTRUCTURE NEEDS. AND IN TERMS OF THE HOUSING NEED, ONE OF THE ISSUES THAT HAS ARISEN IN SOME COMMUNITIES AS WE'VE TALKED ABOUT AND OFTEN CASES, THESE ARE IN RURAL COMMUNITIES, IS THERE MAY NOT BE HOUSING CODES, SO YOU DO HEAR STORIES OF THIS POD MAY BE AN INTERESTING ALTERNATIVE AND MAYBE IN MANY CASES IN MUCH BETTER SHAPE THAN WHAT SOME 60 OF THE HIGH PRICED APARTMENTS ARE ACTUALLY GOING FOR. SO THERE MAY BE A NEED FOR HOUSING CONDITION IMPROVEMENTS. >> TOM, ARE YOU STILL WITH US? >> YES I AM. I THINK A LOT OF THESE ISSUES THAT HAVE BEEN BROUGHT UP ARE EXCELLENT, AND I THINK ONE OF THE THINGS WE NEED TO KEEP IN MIND IS THAT IT REALLY DEPENDS ON THE -- THE IMPACTS DEPEND ON WHERE YOU ARE. BECAUSE IN MY COMMUNITIES, THEY ARE TOTALLY DIFFERENT THAN THEY ARE IN NORTHERN PENNSYLVANIA, AND TOTALLY DIFFERENT THAN IN NORTH DAKOTA OR TEXAS. SO I THINK IT'S REALLY IMPORTANT TO, ONCE AGAIN, TO ENGAGE ALL THE LOCAL PARTNERS, TO PARTICIPATE IN ALL OF THEIR RESEARCH PROJECTS, AND TO BE FULLY ENGAGED. >> CAN YOU GIVE US A LITTLE DESCRIPTION OF THOSE DIFFERENCES? SURE. AT OUR LAST FORUM, HOUSING FORUM, JOEL MANSKY IN NORTH DAKOTA SAID YOU KNOW, OHIO IS JUST STARTING, AND YOU ARE ABOUT THREE YEARS BEHIND WHERE WE ARE. THAT'S ABSOLUTELY RIGHT. WE ARE JUST GETTING THE GROWTH OF HOUSING -- OR THE GROWTH IN DRILLING AND DRILLING PERMITS. BUT IN NORTH DAKOTA, RURAL NORTHWEST NORTH DAKOTA, THERE JUST SANITY WHOLE LOT OF HOUSING TO BEGIN WITH. THERE AREN'T A LOT OF MAJOR CITIES TO DRAW FROM. IN OHIO, EASTERN OHIO, IT MAY 61 BE AN APPALACHIAN AREA, HOWEVER, THEY'RE ALWAYS NEAR PITTSBURGH, NEAR YOUNGSTOWN, NEAR CHARLESTON, WEST VIRGINIA, NEAR COLUMBUS, OHIO, NEAR CINCINNATI, SO THERE ARE ALWAYS OPPORTUNITIES, BUT THE AREAS ARE UNIQUE, AND THAT'S WHAT MAKES THE HOUSING CHALLENGES SO UNIQUE. >> WHILE I HAVE YOU HERE, TOM, YOU TALKED A LITTLE ABOUT THE HOUSING FINANCE AGENCY THERE IN OHIO. WHAT ARE SOME OF THE STATE AND LOCAL GOVERNMENTS DOING WITH REGARD TO AFFORDABLE HOUSING? HUD IS WORKING WITH ALL OUR PARTNERS TO PROMOTE AFFORDABLE HOUSING, WHICH IS NOT NEW. WHAT IS NEW IS WE'RE ACTIVELY ENGAGED IN WORKING WITH THE HOUSING AUTHORITIES ON THIS SPECIFIC ISSUE. ANTONIO RILEY, REGIONAL ADMINISTRATOR OF REGION FIVE, CAME TO OHIO AND PRESENTED ALONG WITH ME AT A MEETING WITH ALL OF THE EXECUTIVE DIRECTORS FOR THE OHIO PHAS, AND THIS IS WHAT WE ENGAGED THEM ON, WE LISTENED TO WHAT THEIR ISSUES ARE, WE'LL WORK WITH THE OHIO HOUSING FINANCE AGENCY AND OHIO STATE UNIVERSITY AND OHIO UNIVERSITY ON RESEARCH, ON IDENTIFYING NOT JUST WHAT THE IMPACTS ARE ON AFFORDABLE HOUSING, BUT ON INFRASTRUCTURE, EMPLOYMENT, HEALTH AND ENVIRONMENTAL CONCERNS. >> THANKS. >> I CAN ANSWER, TO THAT, IN NORTH DAKOTA, WHICH IS THE BAKKEN REGION, PRIMARILY, 62 WHERE LOCAL BOTTOM, STATE BOTTOM, HAS BEEN ACTIVE FOR SOME TIME TRYING TO ADDRESS THE ISSUE, WHAT CAN THEY DO. HUD, AND YOU MENTIONED JOEL MANSKY, THE FIELD OFFICE DIRECTOR, IN FARGO, IS THE GUY ON THE GROUND IN NORTH DAKOTA THAT IS ENGAGING WITH THE LOCALS. BUT EXAMPLES ARE THE NORTH DAKOTA LEGISLATURE APPROVED A HOUSING INCENTIVE FUND LAST YEAR DURING AN EMERGENCY SESSION DEALING WITH THE FLOODING. IT'S A $15 MILLION STATE TAX CREDIT PROGRAM MODELED VERY SIMILAR AFTER INDIVIDUALS IN THE STATES MAKE CONTRIBUTIONS AND GET A TAX CREDIT TOWARDS INSURING A NEW AFFORDABLE MULTI FAMILY HOUSING EXISTS IN NORTH DAKOTA. WE'VE ALSO CONTINUED TO ENCOURAGE THE STATE GOVERNMENT AGENCIES THAT DISTRIBUTE COMMUNITY DEVELOPMENT BLOCK GRANT HOMES AND EMERGENCY SHELTER GRANTS TO THINK ABOUT EARMARKING DOLLARS IN THOSE LOCAL AREAS THAT ARE BEING DIRECTLY IMPACTED BY THE HOUSING SHORTAGE. SO THAT TAKES A REALLOCATION, A RETHINKING PROCESS OF HOW THOSE DOLLARS FLOW FROM THE FEDS TO THE STATE LEVEL. IN ADDITION, SOMEONE ASKED THE QUESTION EARLIER ABOUT THE HOMELESS ISSUES. CLEARLY, THERE'S AN UPSIDE OF OIL AND GAS ECONOMY IN THESE STATES, AND THERE'S ALSO A DOWNSIDE, AND MANY FOLKS, SOME SENIORS, ELDERLY, DISABLED INDIVIDUALS, ARE BEING DISPLACED. THEY TYPICALLY END UP ON THE 63 STREET IN SOME OF THE LARGER COMMUNITIES. SO THERE HAS BEEN A REFOCUS IN NORTH DAKOTA ON THE HOMELESS NEEDS ASSESSMENT. WHICH THEY'RE TRYING TO DO A BETTER JOB OF REDIRECTING THE TRADITIONAL CONTINUUM OF CARE DOLLARS THAT FLOW INTO THAT STATE TO TRY TO IMPACT THESE POPULATIONS MORE DIRECTLY. AND THEY'VE ALSO EMBARKED ON A HOUSING NEEDS STUDY, INDEPENDENT OF WHAT ANYBODY ELSE MIGHT BE DOING, OR SOME OF THE ENERGY COMPANIES, TO TRY TO GET A HANDLE ON WHAT THEY THINK THE FIVE, 10, 15 YEAR HOUSING NEED REQUIREMENT IS GOING TO BE. AND WHAT THEY'VE PREDICTED, AT LEAST THE POPULATION GROWTH, IS THEY'RE GOING TO REQUIRE 3500 TO 5000 HOUSING UNITS EACH YEAR TO BE DEVELOPED TO MEET THEIR GROWING DEMAND. SO I SUSPECT THAT WILL BE ADJUSTED EACH YEAR BASED ON THE KINDS OF PERMIT GROWTH THAT THEY'RE GOING TO BE EXPERIENCING. >> PENNSYLVANIA, TIM REMINDS ME THE IMPACT FEES IN PENNSYLVANIA, MUCH OF WHICH ARE GOING INTO THE PENNSYLVANIA HOUSING FINANCE AGENCY, FOR ADDITIONAL HOUSING RESOURCES, THEY DO HAVE A REQUEST FOR PROPOSALS OUT RIGHT NOW, ACCEPTING PROPOSALS TO DEVELOP ADDITIONAL HOUSING, AND IN SOME RELATED INFRASTRUCTURE NEEDS, THERE HAS BEEN AT LEAST ONE COUNTY, BUTLER COUNTY, WHERE THERE WAS A WATER PROBLEM AND IMPACT FEES WERE ACTUALLY USED BY THE COUNTY TO DRILL SOME CLEAN 64 WATER WELLS THAT WERE DONATED BACK INTO THE COMMUNITY. SO THAT'S ANOTHER EXAMPLE OF HOW THOSE IMPACT FEES COULD BE USED. >> AS THE SECRETARY SAID WHEN DISCUSSING THIS ISSUE WITH THE NATIONAL LOW INCOME HOUSING COALITION, IT'S A PROBLEM OF SUCCESS, RIGHT? WE'VE GOT FABULOUS ECONOMIC GROWTH AND OPPORTUNITIES HERE, BUT THEY GENERATE PROBLEMS. BUT WE HAVE A PLACE TO GO TO FIND THE RESOURCES TO SOLVE THOSE PROBLEMS. I'D LIKE TO OPEN IT UP TO THE AUDIENCE IF THERE'S ANYBODY HERE WHO HAS A QUESTION THEY WOULD LIKE TO PUT TO THE PANEL. >> THANK YOU ALL FOR YOUR THOUGHTS. I'M REALLY INTRIGUED BY THESE SORT OF CREATIVE HOUSING ALTERNATIVES. THE WALMART MODULAR UNIT, THE SHIPPING CONTAINER UNITS, AND I'M CURIOUS, ARE THESE LEGAL IN A LOT OF THESE PLACES, ARE THEY ACTUALLY BEING INSTALLED OR BUILT? >> WELL, THEY ARE IN CLOVIS, NEW MEXICO. SOMETHING SIMILAR TO IT. ARE THEY LEGAL? YES. IF THEY DON'T HAVE ANY CODES FOR THAT CITY OR COUNTY, THEY'LL DO ANYTHING. AND I'VE SEEN IN SOME RURAL AREAS, I MEAN, YOU'VE GOT HOUSES WITHOUT BATHROOMS. SO IT HAPPENS. >> WE'RE NOTICING SOME OF THE SMALLER AREAS ARE TRYING TO WRAP THEIR HANDS AROUND HOW QUICKLY THIS IS GROWING OR NOT GROWING AND IN SOME CASES 65 YOU'RE DOING A MORATORIUM OR TRYING TO PUT LIMITS AND IN SOME CASES THEY'RE TRYING TO DEFINE WHAT A HOUSING UNIT IS FOR THEMSELVES, NOT AT A HUD LEVEL BUT AT A LOCAL LEVEL. >> I'M LIZ CALK WITH PD & R. THE ONLY ROLE HUD HAS IN MOST OF THAT IS WHEN FHA GETS INVOLVED, SO WHEN THERE'S AN FHA-INSURED UNIT, THEN HUD CAN REQUIRE THAT IT MEET A LOCAL OR STATE BUILDING CODE. BUT INDEPENDENT OF THAT, WE REALLY DON'T HAVE MUCH OF A ROLE. I THINK THAT WOULD BE A VERY HELPFUL RESEARCH OBSERVATION FOR FIELD STAFF TO COME BACK TO US WITH PHOTOGRAPHS WHEN THEY RUN ACROSS INSTANCES LIKE THAT, JUST SO WE CAN UNDERSTAND BETTER WHAT THE ROLE IS OF ALTERNATIVE HOUSING IN A BOOM OR BUST TOWN LIKE THIS. AND LIED -- I'D LIKE TO HEAR FROM YOU -- I APPRECIATE THE REGIONAL DIFFERENCES, AND THERE ARE VERY STRONG ONES, BUT WHAT ARE SOME OF THE LESSONS LEARNED, OR WHAT CAN HUD PROVIDE TO LOCAL HOUSING SUPPLIERS, REGULATORS, STATE AND FEDERAL OFFICES, WHAT CAN WE DEVELOP FOR YOU THAT WOULD MAKE THIS VERY DIFFICULT PART OF YOUR JOB EASIER? WHAT COULD YOU HAVE KNOWN BEFOREHAND SO THAT WHEN IT STARTED, YOU WOULD HAVE FELT BETTER PREPARED IN SOME WAY. >> I'LL MENTION JUST A COUPLE OF THINGS BEFORE I TURN IT OVER TO MY COLLEAGUES. LESSONS LEARNED, YOU HEARD ONE OF MY AHA MOMENTS IN A MEETING WITH SOME OF OUR OTHER FEDERAL PARTNERS AND HOW HUD WAS THE ONLY ONE AT 66 THE TABLE PAYING ATTENTION TO THE PEOPLE, OR RECOGNIZING THERE COULD BE AN ECONOMIC DEVELOPMENT IMPACT. SO THAT WAS -- YOU KNOW, THAT WAS A PRETTY AHA MOMENT, AND MAYBE THAT SPEAKS TO US AT THE FEDERAL LEVEL, NEEDING TO CONTINUE TO WORK WITH NOT JUST -- I KNOW EACH OF US WORKS WITH OUR COUNTERPART REGIONAL ADMINISTRATORS, BUT ENCOURAGING THEM TO GET THAT DOWN TO THEIR FIELD LEVEL. I DID SPEAK TO MY EPA COUNTERPART AND HE SAID OH, ARE YOU INVOLVED IN THAT ISSUE, EVEN THOUGH WE'RE WORKING TOGETHER ON SC-2 AND SUSTAINABILITY ISSUES, AND YOU KNOW, KEEP EACH OTHER INFORMED PRETTY WELL, THIS ONE DID NOT DAWN ON HIM, AND HE'S A PRETTY SAVVY GUY. SO THAT WAS A LEARNING -- A LESSONS LEARNED. IN TERMS OF THINGS THAT I THINK WE COULD USE IN THE FIELD, IT REALLY IS ALTERNATIVES THAT WE COULD GIVE TO OUR PUBLIC HOUSING PROVIDERS WHICH ARE HAVING ALL THIS DIFFICULTY HOUSING THEIR VOUCHER HOLDERS. YOU KNOW, WE CAME OUT WITH TRAINING ABOUT WHAT ARE ALL THE ALTERNATIVES, WE HAD INFO SHEETS THAT WENT OUT TO THE PUBLIC HOUSING AUTHORITIES. OW KNOW -- YOU KNOW, WE'VE GOT THIS NEW TOOL THAT WAS DEVELOPED WITH THE RENT CHANGES, AND THOSE WERE ALL INCREDIBLY HELPFUL. BUT THAT'S A NOTE IN ADVANCE, AND I SUSPECT A SIMILAR KIND OF ISSUE, AS YOU LOOK AT SOME OF THE LACK OF RENTAL RESOURCES IN NEW YORK AND NEW JERSEY AS A RESULT OF 67 HURRICANE SANDY, THEY'RE NOT THERE ANYMORE, WHAT ARE THE ALTERNATIVES WE HAVE TO CREATE SOMETHING QUICKLY OR TO MAKE WHAT'S OUT THERE THAT'S PROBABLY TOO EXPENSIVE FOR FMRS AVAILABLE TO US ON AN EMERGENCY NEED. >> I THINK IT'S A GREAT QUESTION, AND KIND OF RIGHT OFF THE TOP, IN MY EXPOSURE TO THE SECTION EIGHT SIDE OF THE CHALLENGES THAT PUBLIC HOUSING AUTHORITIES HAVE HAD, YOU KNOW, IN A RELATIVELY RURAL PART OF MY REGION, EASTERN MONTANA AND WESTERN NORTH DAKOTA, IT'S BEEN RELATIVELY NEW, BUT -- AND THESE ARE SMALLER HOUSING AUTHORITIES THAT DON'T HAVE A LOT OF CAPACITY IN TERMS OF PROFESSIONAL STAFF AND RESOURCES. SO THEY DO HAVE TO LEAN HEAVILY ON US OUT OF OUR REGION EIGHT CENTRAL OFFICE. SO IF WE CAN PROVIDE MORE UP FRONT INFORMATION, THEY KNOW NOW HOW MUCH THEY KNEW BEFORE ABOUT THE PAYMENT STANDARD, EXCEPTION, OPPORTUNITY. FORTUNATELY THAT CAN BE APPROVED UP TO 125 PERCENT OF THE -- >> I THINK WE GO UP TO 135. >> BUT I THINK THE -- 20 OR 25 IS AT THE REGIONAL LEVEL. YOU HAVE TO GO TO HEADQUARTERS BEYOND THAT. SO IF SOME OF THAT COULD BE STREAMLINED, I THINK THAT WOULD BE BENEFICIAL THE ONE OTHER THING THAT IT'S PROBABLY THOUGHT A -- PROBABLY NOT A STANDARD THAT IS USED ROUTINELY, IT TAKES A LITTLE BIT OF PRODDING AND PROBING, AND CAJOLING, BUT IF SOME OF THE ECONOMIC DATA 68 THAT'S BEEN USED FOR VACANCY RATES AND AVAILABLE HOUSING INVENTORY IS LIMITED, AND IT IS OFTEN THROUGH THE ACS SURVEY DATA THAT THEY ARE REQUIRED TO USE FOR THE FMRS, IN SMALLER, RURAL PARTS OF MY REGION, THERE COULD BE SPECIAL TOOLS USED TO CREATE MORE DIRECT DEEPER DATA, AS I LIKE TO REFER TO IT, THROUGH RANDOM SURVEYS. THAT COSTS DOLLARS, BUT IT COULD MAKE A BIG DIFFERENCE IN THE LIFE OF A SMALLER HOUSING AUTHORITY IN THESE AREAS THAT CAN CONTINUE TO MAKE THEIR SECTION EIGHT PROGRAM WORK FOR THE RESIDENTS THAT THEY'RE EXPECTED TO DO. >> ACTUALLY, WE'RE WORKING ON THAT RIGHT NOW. I'VE GOT ONE THAT CAME IN MY MAILBOX AND WAS SUPPOSED TO GO TO THE CONTRACTOR BUT THE FORM CAME TO ME, BUT WE'LL TAKE CARE OF THAT. >> BUT I KNOW THAT DOESN'T NECESSARILY WORK FOR EVERYONE BUT THAT'S ANOTHER TOOL I THINK, IF WE COULD EXPLOIT MORE ROUTINELY, AT LEAST IN VERY RURAL PARTS OF THE COUNTRY, AND THAT PART OF MY REGION, I THINK IT'S A PRETTY MEANINGFUL OPPORTUNITY FOR THOSE LOCAL PUBLIC HOUSING AUTHORITIES. >> ANY OTHER QUESTIONS FROM THE AUDIENCE? >> TOM, IN COLUMBUS. >> I'M SORRY, TOM? GO AHEAD. >> OKAY, THANK YOU. I ALSO WANT TO EMPHASIZE, YOU KNOW, WHILE THIS IS A GREAT EMPLOYMENT BOOM, THE FOLKS THAT ARE IN OUR HOUSING AREN'T NECESSARILY THE 69 SKILLED WORKERS THAT ARE BEING EMPLOYED, AND YOU KNOW, GOING ON TO SELF-SUFFICIENCY. THE BIG THING THAT I THINK ABOUT IS THE POTENTIAL GAINS TO OUR HOUSING AUTHORITIES AND TO OUR MULTI-FAMILY PARTNERS IN PARTICULAR FROM THE POTENTIAL LEASES THAT ARE PROVIDED TO OTHER TYPES OF LANDLORDS AND LAND OWNERS SO I JUST WANT TO MENTION THAT. ALSO, THAT MAY BE SOMETHING THAT PD & R CAN IDENTIFY, THE POTENTIAL VALUE OF THAT. ALSO IN THE RURAL AREAS, LIKE IN OHIO, THERE'S A MUCH GREATER SHARE OF NONCONVENTIONAL RENTAL-TYPE HOUSING, INCLUDING MOBILE HOMES, HV -- RVS, VANS, AND A MUCH LARGER SUPPLY OF SUBSTANDARD HOUSING. SO THAT'S WHY IN RURAL OHIO, IT'S VERY DIFFICULT TO FIND MORE HOUSING CHOICE VOUCHER LANDLORDS, FOR EXAMPLE. THANK YOU. >> TAKING A LOOK AT THE NORTHERN PORTION OF NORTH DAKOTA, YOU MAY RECOGNIZE THAT THE BLACK FEET NATION SETTLED WITH THE INTERIOR DEPARTMENT A LONG STANDING PROBLEM THEY HAVE. OUT OF IT CAME A BANK. THERE'S A BLACK FEET INDIAN BANK. AND THE QUESTION FIRST IS ARE THEY APPROVED AS A HUD MORTGAGEE, SO THAT THEY CAN INSURE HOMES ON THE RESERVATION WHICH RUNS FROM NORTHERN NORTH DAKOTA, AND THE SECOND HALF OF THAT QUERY WOULD BE ARE WE WORKING WITH OR LOOKING AT THE CONCERNS OF OUR CANADIAN PARTNERS AS IT RELATES TO HOUSING, SINCE THE OIL IN THE WILLISTON BASIN IS 70 COMING FROM BOTH CANADA AND NORTHERN NORTH DAKOTA. >> I DON'T KNOW ABOUT THE DETAILS OF THAT BANK. I DO KNOW THAT ONE OF THE RESERVATIONS IN EASTERN MONTANA, THEY HAVE A COMMUNITY COLLEGE, THE FORT BELL CAMP, IF I'M SAYING THAT, RESERVATION. THEY HAVE A COMMUNITY COLLEGE THAT PARTICIPATED IN ONE OF THE EASTERN MONTANA HOUSING AND WORK FORCE DEVELOPMENT FORUMS THAT I PARTICIPATED IN, AND THERE'S A POPULATION OF NATIVE AMERICANS THAT ARE EXPERIENCING A 20, 25 PERCENT UNEMPLOYMENT RATE THAT ARE IN THE BASIN. AND IT JUST SEEMS LIKE A NATURAL OPPORTUNITY TO TRAIN RESIDENTS OF THE RESERVATION AT THE COMMUNITY COLLEGE FOR OIL FIELD WORK, BECAUSE THEY LIVE THERE. SO THAT'S THE CONNECTION THAT I THINK THEY'RE TRYING TO CAPITALIZE ON RIGHT NOW IN THAT PART OF EASTERN MONTANA. >> I'D LIKE TO RAISE AN ISSUE THAT I ACTUALLY DON'T KNOW TOO MUCH ABOUT, BUT WE'VE BEEN TALKING ABOUT THE RENTAL SIDE AND SUPPLY-DEMAND. I KNOW WHEN I TOOK MY ECONOMICS CLASSES, I USED TO SEE THOSE CHARTS, AND WHEN I DID MY OWN MARKET RESEARCH, I DIDN'T DO THOSE CHARTS ANYMORE. I LIKED SPREADSHEETS INSTEAD. BUT ONE OF THE THINGS THAT HAS COME UP IN TOM'S COMMENT ABOUT DRILLING THAT DOES PROVIDE SOME POTENTIAL INCOME FOR SOME OF THE PUBLIC HOUSING AUTHORITIES, IF THEY CAN ACTUALLY HAVE A SITE TO DRILL ON THEIR OWN LAND, 71 THERE ARE LAND USE ISSUES THAT YOU MAY BE AWARE OF, FOR INSTANCE, BECAUSE OF THE -- YOU HEARD THE DESCRIPTION OF HOW SOME OF THE DRILLING HAPPENS, YOU CAN GO DOWN HERE AND SORT OF GO OUT UNDER SOMEBODY ELSE'S PROPERTY, SO THERE'S A LITTLE BIT OF A QUESTION ABOUT WHO OWNS THE LEASE. AND THEN IF YOU REALLY GET INTO IT AND IF YOU ARE A HOMEOWNER AND YOU ARE HAVING A LEASE, REALLY, WHAT THE OIL COMPANY, TO DRILL ON YOUR PROPERTY, YOU'RE GETTING REVENUE FROM THAT. THERE MAY BE AN ISSUE WITH SOME OF THE LENDERS ABOUT THE NEED TO SUBORDINATE YOUR MORTGAGE TO THE LEASE. SO THAT'S PROBABLY A PLACE WHERE THAT'S GOING TO BE INVOLVED WITH OUR FHA SIDE OF THE HOUSE. >> ANY OTHER QUESTIONS? ANY THINGS YOU GUYS WANTED TO ELABORATE ON? WELL, THANK YOU VERY MUCH FOR PARTICIPATING. IT WAS A VERY INTERESTING PANEL. IT'S A CHALLENGING ISSUE THAT WE'LL ALL BE DEALING WITH FOR A NUMBER OF YEARS. AND WE THANK YOU FOR YOUR IDEAS. WE'LL KEEP TRYING TO PROVIDE THE KIND OF RESEARCH AND SUPPORT THAT YOU ALL NEED IN THE FIELD TO HELP COMMUNITIES DEAL WITH THE ISSUES THAT THEY'RE FACING HERE. JEAN? >> I'D LIKE TO THANK EVERYONE FOR THEIR PARTICIPATION TODAY AND THE PANEL DISCUSSION. IT WAS VERY INTERESTING AND VERY INFORMATIVE. 72 AND WE'RE DELIGHTED THAT ALL OF YOU WERE ABLE TO JOIN US TODAY. AND PLEASE JOIN US IN A NICE ROUND OF APPLAUSE. >> [APPLAUSE] >> AND OUR NEXT QUARTERLY WILL BE ON MARCH SEVENTH AND WE'RE GOING TO HAVE OUR QUARTERLY HOUSING MARKET UPDATE, AS WELL AS A PANEL DISCUSSION ON INCLUSIONARY ZONING. SO HAPPY HOLIDAYS TO YOU, AND THANK YOU VERY MUCH.