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Permits point to surge in building

After spending most of the past decade in a rut, Hillsborough County's home-building industry appears to have emerged from the doldrums brought on by a nationwide recession.

During the first three months of this year, officials in Hillsborough issued more residential building permits than during any quarter since early 1987.

"It looks like we're out of the slump of the early '90s," said Michael Stover, head of research and analysis for the Hillsborough County City-County Planning Commission, which compiled the statistics.

From January to March, developers pulled 2,642 building permits. Slightly more than half were for multifamily projects such as apartments and condominiums, and about 43 percent were for single-family homes. Mobile homes and duplexes accounted for the remaining fraction.

The most active areas were in northern Hillsborough. Developers pulled permits for 566 apartments in Tampa Palms, 224 homes in the Carrollwood Key subdivision and 240 apartments in Town 'N Country. Another 348 multifamily homes were permitted in Brandon.

Despite the comeback, the executive vice president of the Builders Association of Greater Tampa said no one should look for the kind of boom that Hillsborough once had.

"It certainly won't be back at the levels of the mid- to late '80s," Joe Narkiewicz said. "I think those days are pretty well gone."

During 1985 and 1986, the county consistently issued an average of more than 1,000 residential building permits a month. In the spring of 1985, it issued more than 5,000 permits for new homes and apartments during one three-month period.

"What you see now is a little more activity" than in recent years, Narkiewicz said, "but it's kind of guarded. . . . We've finally come out of the recession, but what will '97 hold is the question mark."

Narkiewicz said there are some "mixed sentiments" that influence the number of new housing starts. For example, he said "some of the current activity had been in anticipation of interest rates increasing."

Sounding a familiar theme, Narkiewicz said the number of housing starts "could actually be greater than what they are. Prices have increased somewhat due to the regulatory structure and impact fees."

Government-imposed costs constitute about 25 percent of the cost of building a home, Narkiewicz said. In Hillsborough, he said, impact fees _ which government collects to provide the roads, schools, water lines, sewer service and parks that development requires _ add $6,000 to $7,000 to a new home's price.

Cutting fees and other regulatory costs of building a home, he suggested, would help spur additional construction.

"And then we could have no roads," countered Hillsborough County Commissioner Ed Turanchik. "We would not have a road-building program if we got rid of impact fees. It is the most fiscally irresponsible position you could have."

Turanchik said $3,000 to $4,000 of the county's residential impact fees cover the cost of hooking a home up to water and sewer lines. That, he said, is about the same as the cost of putting in a septic tank, drainage field and well to serve a new house.

Not charging the water and sewer capacity fees would push up the county's utility rates by 25 to 30 percent, he said.

"If you're going to eliminate impact fees, you'd better have something to replace it with," Turanchik said. "Residential building might be encumbered somewhat by impact fees, but it's better than having no transportation capacity, in which case you couldn't even pull a building permit."