Armed with a report on the impact of the Bakken oil formation on Saskatchewan, the head of the Southeast Regional College is working on plans to develop an affordable housing project for Estevan.
Dion McGrath, the president and CEO of the college, was the featured speaker at the Estevan Chamber of Commerce's monthly luncheon last Wednesday. During his speech at the Saskatchewan Energy Training Institute, McGrath provided an overview of the report and touched on the next steps in their quest to develop a housing project that could provide accommodations for students and others in need of housing.
The lack of affordable housing has been a lingering issue in Estevan for five years and the problem has had a detrimental impact on the community in a variety of ways. One particular problem he pointed to was how the lack of housing and high rental prices have made it very difficult for local businesses to find employees and grow their operation.
McGrath said the college has not been immune, as the inability to find affordable accommodations has chased away many potential students. Because of that, he admitted the $14 million institute is underutilized.
To help them build a business case to present to both the federal and provincial governments as well as the business sector, the college commissioned McNair Business Development to create a report on the Bakken play and the impact it has had on the province. Furthermore, the report shows how an investment by government and the private sector would help improve the situation.
"Here's one of the key questions that we wanted to know; if we could actually address the housing situation that seems to be a bottleneck to economic growth because jobs can't get filled, businesses can't expand, opportunities can't be captured what could that mean? Would that unleash more growth?" McGrath said. "The answer is yes. If we can address some of the unfilled jobs in the region, primarily due (to the fact) there is a lack of housing for anyone to live, we could produce more growth that would benefit more people."
According to figures from the report, in 2012 the Bakken play accounted for $4.6 billion in gross domestic product, which was almost 6.5 per cent of the provincial GDP. It also generated $764 million in revenue for the province, 8,600 jobs and $525 million in paycheques.
"Since 2008 over $4 billion in provincial revenues has been generated out of the Bakken activity," McGrath said. "It's astronomical."
That remarkable level of activity has affected Estevan in a number of ways, most obviously on the housing front.
Using data from a separate report the college commissioned on housing, McGrath said it's clear that the start of activity in the Bakken play has directly impacted the local housing market.
For example, since 2008, when the Bakken boom began, the average monthly rent in Estevan has increased by almost $400. As well, the vacancy rate has consistently hovered around zero per cent.
On top of creating all manner of headaches for those looking for housing, McGrath said the low vacancy rate has negatively impacted the college's Estevan campus. He noted that in 2008 the number of full-time students in Estevan was over 150. As the vacancy rate has plummeted so too have the number of students as they currently have 60.
"I found it quite interesting that our full-time student population is almost a mirror of the vacancy rate in Estevan," he said.
McGrath added if they are able to get the housing situation straightened out, the college would have a terrific opportunity to offer programming that would be more in line with the labour market needs in Estevan.
"But we are going to have a tough time doing anything new if (the students) are not already living here, don't have a place to live here, someone to live with, some couch to lay on, a tent which they can pitch outside, which has happened in the past two years, a trailer to pull up onto our lot, which has happened for the past two years, or they can drive from wherever they have to live," he said.
"We are going to have a tough time as an organization maximizing and optimizing this beautiful piece of infrastructure that the federal and provincial governments provided."
Although the college is clearly his focus, McGrath said they are taking a big picture approach to the matter, noting that business and industry are also feeling the sting.
"Business and industry are having a tough time filling the 1,000-plus jobs that are advertised at any one time in this part of the country," he said. "Why are they having such a hard time? Because they can't attract anyone who is not already living here because they can't find a place to live. Many of them have stated that.
"So there is an opportunity to tackle the housing problem; to enable business and industry to attract some skilled, trained employees because there will be an affordable place to live."
With their mutual concerns, McGrath said there is an opportunity for the college, community and private sector to get together and create some affordable housing rental units.
Up until now, the college has taken the lead, performing the due diligence and speaking with government officials and the private sector. They are now at the point where they must determine whether or not the information in the Phase One report provides them with the necessary evidence to continue their work.
He added that another critical component will be the support of local business and industry and that he will not approach any level of government unless there is a strong showing of support.
"I want to underline, I think there is a growth opportunity for multiple stakeholders, first and foremost, the private sector. With 1,000-plus jobs advertised and unfilled, there has got to be a productivity increase and a growth increase for the private sector if those jobs get filled," McGrath said.
"I believe, if we do this right, if we do the due diligence, if the numbers add up, I will be able to present in the coming weeks and months, an investment opportunity for those who want to invest to get access to affordable rental housing. That is the goal."
McGrath said if the college and others involved decide to move forward they will work with their consultants and develop a business plan to present to industry. That would likely be followed by a capital campaign to gauge the amount of interest.
"I was just provided a copy of the Phase One results. I haven't reviewed them yet so I need to review them over the next few days and we will internally determine for the college whether or not there is sufficient evidence contained (in the report) and whether or not it warrants the investment into Phase Two."
