Fewer building permits lead to less revenue for towns
BY MATT KAKLEY SUN CHRONICLE STAFF
Tuesday, January 26, 2010 2:17 AM EST
Existing home sales rose in 2009 despite the largest monthly drop in more than 40 years in December. Prices fell sharply, though, which may indicate the housing market remains weak. Locally, fewer building permits being issued is leading to less revenue for towns. (Associated Press photo)
With the economic recession stalling construction projects, many area communities have been issuing fewer building permits and seeing a corresponding drop in permit revenue at a time when municipal budgets are already strained.
In Attleboro, a lack of big construction projects has caused a drop in revenue from building permits during the first six months of the current fiscal year, which began in July.
The city issued 1,600 permits between July and December of last year, down from 2,000 during the same period in 2008.
The drop in permitting numbers has corresponded to a 35
percent drop in permit fees collected.
During the six month period in 2008, the city collected $451,972, while the same time period in 2009 only resulted in $292,275 being added to city coffers.
Thanks largely to the buildup of Patriot Place on Route 1, Foxboro took in an astronomical $1,482,470 in fees for the 841 permits issued in calendar year 2008.
With most of that work completed, however, the town came back down to Earth in 2009, taking in only $171,530, while issuing 200 fewer permits than the previous year.
"The actual cost of construction has dropped dramatically," Building Commissioner William Casbarra said.
Norfolk has also seen a drop in permit requests, with the town issuing only 285 permits in calendar year 2009, a drop of 48 from the previous year.
Along with the drop in permits issued, the town took in less money, raking in only $154,184 in 2009, compared with $215,586 the previous year.
While revenue numbers from permitting fees were not available, both Plainville and Rehoboth have seen drops in the number of building permits issued.
Rehoboth issued 485 permits in calendar year 2008, but only issued 373 permits in 2009, according to the town building department.
Plainville, meanwhile, issued 162 permits in the first sixth months of fiscal year 2009, while only issuing 137 in the first sixth months of fiscal year 2009.
Some communities, however, have been bucking the trend, thanks in part to some timely, large-scale construction projects.
Mansfield was boosted in calendar year 2009 by major projects in the town's business park, including expansions by life science companies Covidien and Medline.
Although the building department issued 47 fewer permits that year than in 2008, the department's revenues soared from $201,504 in 2008 to $615,018 in 2009.
There has also been good news in North Attleboro, where the town's building department has seen an increase in revenue this fiscal year.
During the first six months of fiscal year 2010, the town has brought in $73,479 in building permit fees, a $7,503 increase over the same period in the previous year.
The increase in revenue comes even though the town issued 161 fewer permits.
Building Commissioner Rod Palmer said he has also been heartened by an increase in the number of new single-family homes being built in town.
Permits went out for 20 new homes in calendar year 2009, besting the 12 permits that went out in 2008.
"We're certainly improving," Palmer said. "My hope is that the next quarter will also (go up.)
Seekonk has already issued more permits in this fiscal year than it did all of last year, according to the town's building department, and is on pace to bring in more revenue.
In the entire fiscal year 2009, the town issued 231 permits, bringing in $86,827 in fees. Through the first six months of fiscal year 2010, the town has issued 236 permits and brought in $51,705.
While things continue to look rough for some communities, there is a sense around the area that things may have finally bottomed-out and better days could be coming soon.
"Looking at our revenue, it appears that it might be bottoming out," Palmer said. "I don't think it's all so gloom and doom."
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