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Vol. 14, No. 08 — April 11, 2012
The new homeless

There are environmental impacts of natural gas drilling that need to be managed, and then there are human impacts.

In February 2012 National Public Radio (NPR) reported that a group of churches in northern Tioga County opened the area's first-ever homeless shelter to feed persons displaced by the influx of natural gas industry employees. Individuals working at a nearby drilling site reportedly made donations to help the work of the Jemison Brethren in Valley Christ Church. The establishment of this shelter was necessitated by the unintended impact of the shale gas industry on those in need of affordable housing — the poor and under-employed. In Williamsport, for example, the influx of industry workers caused moderately priced $400-per-month apartments to skyrocket to $1200. This set off a cascade of effects that ended with the lowest income persons being forced out of available housing.

Another example of the ways the shale gas industry can have negative effects on the middle class and working poor is vividly described by Walt Brasch in his Easter Sunday "Wanderings" column in The News-Item of Shamokin. Brasch explained how residents of a 12-acre Mobile Home Village along the Susquehanna River near Jersey Shore, Lycoming County received eviction notices after the park was sold to a water withdrawal company, Aqua PVR (a division of Aqua America), for $550,000. Aqua provides water for fracking gas wells to the industry. Aqua reported revenue of $712 million in 2011, a 4.2-percent increase over the prior year, but reportedly offered home owners just $2500 to relocate. Actual relocation costs were estimated to be $6000 to $11,000 — and that was only if the trailer was capable of being moved to another location. Some trailers were reported to be old and not in good enough condition to withstand a move.

Lycoming College's Dr. Bonita Kolb, with funding from the Pennsylvania Housing Finance Agency (PHFA), has studied the effect of the natural gas boom on housing in Pennsylvania's upper tier and southwestern counties. Kolb's research described three waves of demand that affect local housing options: (1) the shorter-term influx of industry personnel who seek to acquire land leases for well sites; (2) the mixed-term migration of employees to work on drill rigs; and (3) the longer-term movement of industry professionals who have the purchasing power to demand new houses rather than rental units. The study's authors concluded that while the effects are broad based and include positive impacts on housing, the negative impacts are most severely felt by those who live on the economic margins — the working poor, seniors, the disabled, and the non-working poor.

As Dr. Kolb explained to NPR: People who can't find really nice housing move into okay housing, people in okay housing move into rundown housing, and people who live in rundown housing — they fall off the ladder. These are impacts that should have been anticipated.

The housing shortage may ease temporarily as the industry cuts back on drilling because of low natural gas prices. But the problem will no doubt return with the drilling rigs when gas prices increase and stabilize. A temporary decrease in demand for housing may — or may not — translate into help for those who have recently lost or are about to lose their homes. It can provide an opportunity for government to take action to address the problem.

On April 3 the PHFA hosted a meeting of state and federal housing agencies to discuss Dr. Kolb's study and to discuss long-range plans for addressing the negative effects of the natural gas industry on housing. The governor's new shale gas legislation, for all of its warts, holds out hope that some help for those in need of low-cost housing may be on the way. Of the fees collected from shale gas development, Act 13 directs an initial payment of $2.5 million and annual payments thereafter of $5 million to the Housing Affordability and Rehabilitation Enhancement Fund to finance affordable housing for low- and middle-income families, persons with disabilities, and the elderly, and to provide rental assistance to those whose incomes do not exceed the median income in counties impacted by the shale gas industry.

When this financing assistance is eventually distributed to those in need, it will no doubt be too late to avert the harm already inflicted upon those who have already lost their homes and find themselves sleeping in the backs of cars for the first time. For others, the assistance may arrive just in time. Those in charge of distributing this portion of the so-called "impact fee" should move quickly, because they have not a minute to waste.