Hammered in ’08, building now up

Written by Walt Cook, The Union Democrat May 18, 2010 11:00 pm

Building permit applications are on the rise in Tuolumne and Calaveras counties, but both counties are seeing far fewer permits compared to just a few years ago.


In the first quarter following the fall/winter 2008 stock market crash, building permit applications dropped off a cliff in both Tuolumne and Calaveras counties.

 

 

For instance, in Tuolumne County, according to figures from the county Community Development Department, new residential permits —including all homes — numbered 11 for the fourth quarter of 2008, putting the county on pace, at that time, for 44 permits over a year-to-year period.

 

Little relief came in 2009, when only 49 permits were sought for new residences.

 

In comparison, in 2005, when the housing boom was in full swing, Tuolumne County logged 415 building permits for single-family homes

 

alone, according to John Feriani, president of the Tuolumne County Building Industry Association.

 

The drop-off in permit activity from 2005 to 2009 in Calaveras County was even worse. That’s largely because Calaveras County — home to some large uniform developments — saw more activity during the boom than did Tuolumne County.

 

Permit activity picked up in the latest quarter — Jan. 1 to March 31 — which has seen 21 building permit applications for new homes in Tuolumne County. That’s the highest figure since the last quarter of 2008.

 

Permit applications for new commercial buildings are also on the rise in Tuolumne County. The latest quarter has seen six applications, the highest going back to the last quarter in 2008. Between then and the latest quarter, only one to three commercial building applications were received per quarter.

 

Things are picking up some in Calaveras County as well.

 

“We’re seeing a little bit of improvement,” said Calaveras County building official Jeff White. “Whether it’s just a temporary thing, it’s hard to tell. It’s fairly equal to the activity we had last year.”

Feriani acknowledged the latest rising figures, but he noted that the numbers are a far cry from what they were even in 2008 — a stark year by builder standards — when 122 new single-family residence permits were sought. From roughly 2002-06, he noted, permit requests numbered hundreds annually.

 

“This year is probably the worst year I’ve had ever,” said Feriani, who owns Tuolumne-based Feriani Construction.

He added: “The next couple of years don’t look very good.”

 

That’s largely because a glut of unsold homes and foreclosed homes can be found — at low prices — in both Tuolumne and Calaveras counties, Feriani said.

 

Big subdivisions in Calaveras County, like those found in the Copperopolis area, have been especially hammered by foreclosures.

 

The average homes prices in both counties has fallen big-time since 2006. In Tuolumne County, for instance, the median home price sits at $219,000, down from $330,000 in 2006.

 

With such prices and a large inventory of unsold homes, Feriani predicts demand for new homes will remain low.

In such a tough construction market, Feriani also worries about government regulations that can involve fees amounting to several thousand dollars.

 

“In today’s market, they (fees) cut a lot of people out of the market,” he said.

 

For instance, he said it’s not uncommon for fees — including sewer, water, encroachment, building-permit, engineering, power, and community impact charges — to come to $40,000 for a 1,200-square-foot home, which Feriani called “a small home.”

 

The burden can be enough to deter some people from building homes, he said.

 

Feriani is among those currently fighting to suspend or modify the county’s affordable-housing ordinance, which requires developers of 10 or more lots to designate 10 percent as affordable or pay a $2,100 in-lieu fee for each affordable lot. Developers of fewer than 10 residential lots, meanwhile, must simply pay the in-lieu fee, even if they’re building just one home.

 

Feriani called such fees the “straw that breaks the camel’s back.”

 

Affordable-housing advocates, meanwhile, defend the ordinance, saying even current home prices are out of reach of Tuolumne County’s median-income earners. Proponents of fees and regulations note that rules are in place to ensure quality structures and fees enable governments to mitigate building demands on public services.

 

Feriani said, due to market conditions and the number of fees that must be paid to get a home constructed, “It could get to where only the wealthy can afford to build.”