Signs of Life in Residential Construction, Thanks to Canada

By Beacon Staff

Canadian money has been a boon for Flathead Valley retailers since the recession. Now it’s making its mark on the local housing market as well.

Dave Taylor, Whitefish’s zoning and planning director, said construction activity has been up significantly in his town so far this year. Canadians, taking advantage of cheap lots and affordable building prices, are responsible for at least part of the increase in building permits, he said, specifically for second homes with lakeshore property.

Taylor said there are also other new homes, such as spec houses, that are indicative of local activity. Whether it’s Canadian or local, Taylor’s just happy to see some construction again, giving both his department and the city budget a much-needed boost.

“In May and June we saw more single-family homes” than in all of 2009, Taylor said. “It’s definitely picked up.”

Of the seven building permits for single-family homes in May and six in June as of last week, Taylor said several are multi-million dollar projects. There is new construction ramping up in Iron Horse, Bill Kahle’s O’Brien Bluffs and elsewhere.

Last year, there were 21 housing starts, up from 14 the year before, Taylor said. Encouraged by the upward trend continuing in 2011, Taylor expects the residential sector to stay busy through the summer.

There is also some activity in the commercial sector as well, in both Whitefish and Columbia Falls, Taylor said. One major project that isn’t underway yet but has completed its architectural review is the reconstruction of Casey’s Bar on the corner of Central Avenue and First Street.

The owners of Casey’s plan to tear down the existing structure and put up an entirely new brick building, Taylor said, though he isn’t sure on the exact timeline for construction.

“That’s a pretty significant project,” he said.

In Kalispell, a fairly robust commercial building season is making up for persistent struggles in the residential sector. Tom Jentz, Kalispell’s planning and zoning director, said the commercial activity is a combination of large remodels and new structures.

Among the notable projects are an Applebee’s restaurant and AutoZone, which is scheduled to go up in the former King Buffet location on Idaho Street. There are also projects at Kalispell Regional Medical Center, Immanuel Lutheran and Pizza Hut all worth millions or hundreds of thousands of dollars, among other commercial renovations.

“You’re talking $50-60 million worth of construction,” Jentz said. “That’s good. That’s what’s been carrying us down here.”

Jentz hinted that more could be on the way.

“We’ve got some inklings that new commercial is going to come in,” he said. “Inquiries have been made.”

Kalispell’s residential building is similarly sluggish to 2010. Foreclosures and vacant homes are impacting the market, Jentz said. While some new homes are planned, including construction at Silverbrook Estates, they are few and far between.

“In terms of single-family, we have one or two a week,” Jentz said. “During the boom it was three or four times that.”

Terry Kramer of the Flathead Building Association echoed Taylor’s assessment of Canadians’ impact on the construction industry. Attracted to low building prices and inexpensive land – “the banks own a lot” – Canadians are also taking advantage of favorable exchange rates, Kramer said. Some are flush with oil money.

“Some Canadians also (build homes here) to diversify their portfolios,” he said. “It’s a smart move and it’s great for us.”

Even with the help of Canadians, Kramer said the local construction industry is still hurting, with the exception of remodel jobs. Kramer has also seen a slight uptick in entry-level homes, but very few custom-built, expensive homes.

“If there’s anything in the higher-end market, it’s Canadian,” he said.

Despite the commercial jobs mentioned by Jentz, Kramer said Flathead Valley’s overall commercial sector – such as new offices – is “extremely flat.” Kramer said remodels are the “glimmer of hope” for his company, Kramer Enterprises, in a competitive market with few jobs to offer.

“We’re never going to get to the boom again,” Kramer said. “But we’re still not to where I think normal would be.”

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