It’s a steady uphill climb for Springfield residential building permits. And although permits filed continue to see an increase, where those homes are coming out of the ground in the Queen City is evolving.
Growth has been slow and steady – and Harlan Hill, director of building development services for the city of Springfield, attributes it to the changing tides of the economy.
“The economy has a lot to do with it,” said Hill. “On the federal level, encouraging businesses to invest, being able to get loans and financing.”
Through the first quarter this year, there were 153 residential and 144 commercial permits granted in the city. If the volume continues this year, there will be 612 residential permits and 576 commerical permits filed by year’s end.
According to city building permit records, there were 571 residential building permits approved and 514 commercial in 2016. In 2017, there was an increase in residential building projects to 618, but a bit of a decrease in commercial projects with 506 overall permits granted.
However, the locations where contractors are breaking ground is changing as construction outpaces available lots for commercial and residential projects. This has led builders and developers to seek out old lots for construction sites in the commercial world or to venture outside of Springfield for residential development.
“We’re running out of the vacant untouched properties,” Hill said. “We’re starting to push up against other existing municipalities.”
As a result, residential and commercial construction has been active in the old areas of the Queen City, Hill said, where crews are demolishing and redeveloping existing properties – such as on Kearney Street and Kansas Expressway.
On Jan. 16, Springfield City Council approved rezoned commercial space off Kansas Expressway on the city’s north side. The rezoning was requested by Kansas & Kearney Intersection Center LLC’s registered agent James Tillman regarding some 5 acres at the corner of the streets where he planned to develop land for a new retail center. With demolition currently in progress, Tillman previously told Springfield Business Journal he expects construction to begin in the second quarter. There is 20,000 square feet of tenant space planned, and the Kum & Go fuel and convenience store chain has already signed a lease.
Jake Crutcher, owner of Republic-based Crutcher Custom Homes LLC, said individuals who build homes on existing lots can expect to pay an additional $10,000-$50,000 for demolition based on the house and location. Because these types of projects are more frequent given the lack of vacant lots, regular prices to build are increasing. For this reason, Crutcher said, home and commercial builders are often looking outside of Springfield to seek developable land elsewhere.
Sean Thouvenot, vice president of commercial contractor Branco Enterprises Inc., said vacant lots are few and far between for commercial development, and demolitions are often part of the building process. Regardless, he said commercial developers continue to build in Springfield.
“Everything, especially in the last month, has just started to explode,” he said. “We’re seeing commercial construction up about 30 percent from last year.”
Another factor that could impact construction costs is a workforce deficit. The U.S. Bureau of Labor Statistics reported a loss of 15,000 construction jobs in March. Nationally, the unemployment rate for the construction sector is 7.4 percent. Despite these statistics, however, Thouvenot said building costs are not being impacted as much by the deficit as it is by the rising cost of construction supplies.
According to the Associated Builders and Contractors, construction materials prices rose by 0.7 percent in February – up 5.2 percent year to date. Prices for all 11 subcatagories of materials increased year over year, and only three saw monthly declines.
Crutcher Custom Homes used to do more remodeling work, but since 2015, Crutcher said 95 percent of his company’s work is new construction. This uptick in residential building has been rising steadily for two years, he said.
In 2017, Crutcher built nine homes in the city limits of Springfield. When the company started focusing on new construction in 2015, he said Crutcher Custom Homes built about 15 homes a year in the area – extending out to Nixa, Ozark, Rogersville and Republic. Now, the company builds about 30 new homes a year, doubling building projects in just three years.
“As the economic conditions have improved, we got back into new construction,” he said. “The only reason we were doing remodeling work was because the market wasn’t really conducive to start building a bunch of homes. When that changed, we changed our approach, and stopped going off remodels and started primarily doing new construction and custom homes.”
Hill said there also has been an increase in new structure permits. New structure data eliminates remodeling jobs, fences and other small projects. In 2016 there were 93 commercial new structure permits approved and 105 residential. In 2017, there were 116 commercial and 117 residential permits. As of March 2018, there are 24 commercial and 39 residential new structure permits granted inside the city limits of Springfield.
In the United States as a whole, there was a 9 percent increase in new privately owned authorized housing units, according to data from the U.S. Census Bureau.
In the state of Missouri, there were 17,852 new privately owned housing units in 2017, according to the bureau data. In 2016 in Missouri, there were 18,997 new privately owned housing units.
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