Building permit activity and construction valuations are down in Aspen, sharply in some cases, so far for 2008 compared to years past.
Through July 16, contractors have applied for 381 building permits, a 16 percent decline from the same period in 2007. Those permits represent $110.9 million in construction valuation, a 17 percent drop from year-to-date figures for 2007. All data are based on building permit history information from the city of Aspen’s Web site.
When looking only at residential construction, which some would say is a more accurate gauge of construction activity, the numbers paint a more nuanced picture. The total number of residential building permits applied for to date in 2008 — 266 — represents a 15 percent decline from 2007, but the value of those permits — $60.7 million — is 39 percent lower than the value last year.
Market analysis from one contractor helps explain the residential numbers. According to Ryan Kottyan, a project manager with Aspen Custom Homebuilders, “the remodel game has been picking up,” but he has noticed “a little bit of a lull” in the general market at the beginning of the summer. So there is plenty of work remodeling houses, which require lower valuation permits than whole-house jobs, and that explains why permit value for residential construction is much lower than the total number of permits applied for. Kottyan attributes the strong remodel market to square footage caps put into place by local governments, which make remodels of existing property more attractive when a customer can’t build as extensively as he or she might like if he or she were to tear down the house.
The situation appears to be the reverse of 2005 statistics. More whole-house permits were issued in 2005, and only 6 percent fewer residential building permits in 2005, than in 2008. However, the valuation in 2008 is 45 percent lower than it was in 2005.
While some potential speculative developers might be “sitting on their hands right now,” there’s still plenty of work out there for valley contractors, Kottyan said. “If you do good work, you’ll be fine,” he said. However, he added, the market for subcontracting work such as excavation is beginning to get “cutthroat,” as firms jockey for a shrinking pool of work.
One has to go back to 2004 to find numbers comparable to 2008. Year-to-date construction valuation for 2008 in the residential sector is 9 percent off 2004 figures. The number of residential permits issued in 2008 is actually 15 percent higher than in 2004.
Aspen chief building official Stephen Kanipe noted that many large projects that are ongoing were issued permits in 2007 or before, such as the Limelight, Residences at Little Nell and Dancing Bear.
“Construction actually continues, while permits take a breath,” Kanipe said.
Dave Hall, of Shaw Construction, a statewide firm that works in Aspen, said the numbers don’t lie. “We’re looking for work,” he quipped from his Grand Junction office. Shaw, the contractor on the first phase of the Burlingame affordable housing project, does mostly commercial work, although it is building some large homes in Aspen, Hall said.
The condition of the financial markets is restricting the availability of credit to build new projects for private clients, he noted; as such, Shaw is trying to attract more municipal contracts.
curtis@aspendailynews.com
Comments
Do Your Homework Before You Write the Article
The reality is that construction continues unabated despite the change in city council. There has been no decrease in construction -- count the trucks coming in every day and analyze the number of permits pulled years ago where construction is still ongoing -- a decrease in permits pulled in one given year does not translate into an overall reduction in construction.
We need controls on the numbers of permits issued each year and the number of people working each job (especially in their own trucks). Construction management is, for the most part, a joke.
Now I have complained ...