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Marcellus Straining Housing Stock, Study Finds

Pennsylvania must begin to take steps to protect average homeowners from rising housing costs and rental rates in the Marcellus Shale region, according to a new study.

Although not willing to call the issue a "crisis" yet, the Institute for Public Policy and Economic Development found that housing is becoming more expensive in counties where drilling is more active. Those reaping the benefits of mineral leases or industry jobs can afford the increases, but the majority of Pennsylvanians cannot, the study concluded.

"In order to mitigate these issues, many policy changes must occur, including special programs and financing instruments as well as changes in planning, zoning and community ordinances," concluded the partnership of nine Pennsylvania colleges and universities.

The institute proposes solutions ranging from rent control -- a "big city fix" increasingly of interest to smaller communities -- to loan programs and innovative zoning solutions. The study also recommends protections to ensure that renters can't be evicted without cause.

The youth of the Marcellus and the lag in demographic data make it difficult to pinpoint the situation on the ground and its causes, the study acknowledged, and in addition to the influx of drillers looking for temporary and permanent places to live, the study pointed to factors such as basic supply and demand, the global recession and the housing crisis.

The Marcellus, though, is bringing rapid population and industry growth to a region where many communities haven't seen any growth in any form since the years after World War II, and housing construction doesn't appear to be keeping pace, the study concluded.

The study used government data, press clippings and interviews, as well as previous housing studies from Texas and Arkansas, home of relatively older shale gas plays, to gauge the housing situation in 12 Pennsylvania counties in Marcellus country. The counties -- Blair, Bradford, Cambria, Clearfield, Clinton, Fayette, Forest, Lycoming, Luzerne, Susquehanna, Tioga and Wyoming -- vary in drilling activity and economic status.

Interestingly, the researchers found a gap between public perception and data. While most of the interview subjects did not report any change in the housing market, the available data shows a "correlation between very active drilling and higher cost of housing."

That comes, in part, from the lack of construction, the study concludes, pointing to the fact that even in Bradford County, one of the most active counties in the Marcellus, there are no new subdivisions or low-income housing under construction. Additionally, they heard reports that contractors are taking on well site and commercial work over housing projects.

However, the report also acknowledged that counties with more drilling activity also have lower poverty and unemployment rates and increased building permit applications.

To stimulate construction, while ensuring that low-income housing options remain on the market, the study proposing "land banking" or "housing trust funds" -- where a public or private nonprofit purchases blighted property that it markets for redevelopment -- and mixed-used zoning that requires a certain percentage of low-income housing options.

Although the issue hasn't received as much attention as taxation or environmental concerns, the impact of shale development on housing continues to emerge now and again as a public policy concern. The Marcellus Shale Advisory Commission included housing as an appropriate source of revenue collected from an impact fee, and both proposals under consideration would allocate money from affordable housing (see Shale Daily, Nov. 28).

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