Steamboat Springs The valuation of building permits issued in Routt County in 2011 was down $3.8 million despite a slight increase in the number of permitted single-family homes in Steamboat Springs and elsewhere in the county.
The valuation of building permits in Routt County dropped from $55.2 million in 2010 to $51.4 million in 2011. Last year also marked the third consecutive year when there were no building permits issued for multi-family housing units. As recently as 2008, the county permitted 149 multi-family units with combined valuations of $47.1 million. In 2007, the value of issued multi-family permits was $61.5 million on 265 units.
The volume of single-family home permits rose last year, with the number of home permits issued outside Steamboat growing from 26 in 2010 to 29 in 2011. The numbers exclude Hayden, which has its own building department. And in Steamboat, the number grew from seven single-family home permits in 2010 to 11 last year. But those figures pale in comparison to 2003 and 2004, when 66 and 73 new single-family homes were permitted.
Last year, the average value of permits for single-family homes in the city dropped significantly, while permit valuation in the county went up modestly. The average permit value (which does not reflect the full cost of the completed home) on the seven homes slated for construction in Steamboat in 2010 was $913,857, compared to $539,727 in 2011. However, the total dollar valuation grew along with the number of homes from $3.44 million to $5.93 million.
“We quit doing million-dollar houses, and we’re making more houses for shelter,” Building Department official Carl Dunham said.
Outside the city limits, the combined permit valuation of 29 homes was $19 million, for an average of $655,172. That compares to the 26 permits issued for single-family homes in 2010 for a combined permit valuation of $18.14 million and an average of $697,943.
As recently as 2009, with the national recession in full force but its implications for the local market not fully understood, the Routt County Regional Building Department issued 50 permits for single-family homes in the county with a combined valuation of $29 million.
The Building Department values homes for permit purposes on a per-square-foot basis off a table that creates different classifications of homes. However, Dunham said some contractors this year have succeeded in persuading his department that their valuation, and thus their permit fees, should be lower by bringing in detailed spreadsheets demonstrating they actually would build the house for less than the department’s estimate.
Dunham said builders’ ability to make their case also tells him that they are getting lower bids from subcontractors than his templates anticipated.
Dunham said the fiscal health of the Building Department has improved since the city and county agreed to an increase in fees in 2009.
“We’re not covering our expenses, but we’re able to fund the department out of (reserves). We exceeded our (revenue) budget this year, and if things continue” the department could achieve fiscal stability that should last for a decade or more, he said.
The department is self-funded by the fees it collects, and annual revenue slipped from $1.4 million in 2008 to $566,000 in 2009, raising the possibility that reserves could be completely drained during the building slump. However, the department has trimmed payroll since 2009, and revenues reached $795,000 in 2011.
“We’ll run lean and mean and continue to hope,” Dunham said.
What would it take for building permits to rebound?
Yampa Valley Data Partners released a report this week in which it concludes that before the county’s residential construction industry truly takes off again, the ratio between the existing inventory of homes for sale and the number of actual sales must nearly double and be sustained at those higher levels for more than a year.
“We are projecting that for 2012 the percentage of single-family homes sold in any given month to existing inventory will average 1.4 percent,” the Yampa Valley Data Partners report stated. “This percentage will need to increase to 2.5 percent and above on a sustained basis for 12 to 18 months before there will be any significant increase in new home construction.”
Routt County Building Department official Carl Dunham said Friday that he agrees with that analysis.
Read more of the Yampa Valley FastFacts report at www.yampavalleypartners.com.
Building permits for single-family residences, 2002-11
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com