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Building momentum: Building permits are up, finally

Commercial permits still lag

CHARLOTTE – If you permit it, they will build.

And despite a slow start, Mecklenburg County permitting this year is finally in positive territory compared with the same period in 2012, which opens up the possibility of more construction activity this year than last in the Charlotte market.

As of Thursday of this week, permits are up 1.2 percent, to 6,039, vs. last year’s 5,963.

It’s a measly percentage point, but it’s a start. In the first four months of 2013, the number of construction permits issued by the county building code enforcement agency lagged behind 2012 and took its time catching up.

But, significantly, the value of the permits is still down – way down, by $110 million, or 11.5 percent – compared with last year.

Residential permits, off and running so far this year, are the driving force behind the increase in numbers. But commercial permits, generally worth more than residential, are dragging the total permit value down.

One/two family county permits – for single-family homes, town houses and condominiums – are off to their best start since 2007, while commercial permits are still far behind last year.

Starts in housing for the entire Charlotte market are 40 percent higher compared with last year, said MetroStudy analyst Bill Miley. Closings are also up, by 22 percent, according Bernard Helm of Market Research Enterprises.

When measured as improvement over the previous year, residential permits are up dramatically, by 11 percent, indicating a rebound from the recession-era housing bust.

Meanwhile commercial permits are falling. Between January 1 and May 8 of last year, Mecklenburg County issued 2,441  permits for commercial construction. Over the same time this year, the county issued 2,127  commercial permits, a drop of almost 13 percent.

The value of commercial permits is off even more, by 26.8 percent, from $710 million last year to $520 million in 2013.

Jim Bartl, County Code Enforcement Director, said he thinks he knows why.

Last year’s Democratic National Convention skewed both the number and value of commercial permits upward, meaning this year’s figures are skewed downward in a side-by-side comparison.

“The DNC was the single biggest thing explaining it; we were busier than one-armed paper-hangers last year, all the way up to the convention,” Bartl said.

“We had people out on the street doing last minute stuff – on the facilities and hotels. Then there was a lull. But then there was the putting everything back together.”

Jon Morris, industrial development partner with Charlotte-based Beacon Partners, had another view: Less costly upfit and rehab projects have depressed the value of commercial permits.

“We’ve mostly been doing upfits in our space,” Morris said. “I don’t know when we might be building new again. Maybe in six months, but it’s more likely in 2014.”

On the residential side, the celebration has begun.

“We’re just building more houses, and as fast we can,” said Alan Banks, president of the Home Builders Association of Charlotte. “Buyers are buying, and builders are building.”

 

Mecklenburg Times staff writer Payton Guion contributed to this report.

 

BROWN can be reached (704) 247-2912, tony.brown@mecktimes.com, or on Twitter at @tonymecktimes.

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