Building Permits and Subdivisions on the Rise

By Beacon Staff

Of the many factors that influence economic predictions, one of the most concrete indications of change in an area is movement in building permits. And in the Flathead, the building permits and subdivision plans filing through local municipalities are increasing to optimistic rates.

In Kalispell, city planning director Tom Jentz said the increase in building permits is a healthy shift from last year’s numbers. So far, Kalispell is at 113 single-family units this year, whereas there were 98 in all of 2012.

“We are busy right now and we’re holding our own; we’re not booming,” Jentz said. “I’d like to keep this level going. This is a healthy rate. When you can do 113 homes in a year, that’s a house going up every three days. That’s a nice number.”

Jentz is cautiously optimistic about the increase in building permits, a sentiment shared among planners across the valley. There is no hurry to get back to the wild boom that the valley experienced in 2005 and 2006, Jentz said; the growth happening now is more sustainable.

Flathead County Planning and Zoning Director BJ Grieve echoed that sentiment, saying the number of major and minor subdivision proposals has increased so far this year over last year’s number, with eight in the final plat process as compared to four last year.

There were five major subdivisions – meaning those with six or more lots – proposed, compared to last year’s two. Minor subdivisions match last year’s total of three.

By comparison, Grieve pointed out that the county processed 87 major subdivision projects in 2005 alone, followed by another 70 in 2006.

Grieve said the current turnaround shows promise, especially after activity bottomed out in 2010, but he remains cautious and watchful of economic indicators.

“I’m not getting too excited about it yet,” Grieve said. “I will get excited about it if it continues because I will have to staff up accordingly.”

Since the county planning department does not have building permits, one of the ways to track activity is through the amount of money the department brings in through fees pertaining to all sorts of applications.

In fiscal year 2009, the department brought in over $160,000 in fees, Grieve said. Fiscal year 2012, however, saw only about $48,000. Grieve said he wanted to remain prudent with fiscal year 2013’s fee projections and kept it at $48,000, but the first quarter’s numbers were already much higher than expected.

Another indication of the housing market movement in the valley is the amount of property that has already been approved for subdivisions but was never developed. In real estate, houses that are for sale but not on the market due to poor market conditions are called shadow properties.

These undeveloped subdivisions are referred to as shadow-shadow properties, Grieve said, and in 2012 there were 28 major active subdivisions and 19 active minor subdivisions in Flathead County waiting to be developed.

Some of these entitlements are coming back into play. Since these subdivision projects received preliminary approval, they just need to come back in and move to final plat, Grieve said.

Last Thursday, a developer came in and did just that. The project, called Bear Mountain, is located in Lakeside and includes 26 lots. It was originally approved in 2007, Grieve said, and the developer came in last week to move forward.

“Things like that indicate to me that there are people out there who have these entitlements who think (the market is) looking good,” Grieve said.

Columbia Falls is also seeing an increase in building activity. City Manager Susan Nicosia said permit activity went up over the summer, but the impending winter season is providing more momentum.

“We’ve been busier this fall than we were in the summer,” Nicosia said.

Building permits for September and October are more than double their numbers from last year, she said. The city issued 18 residential permits valued at $1.5 million and three commercial permits valued at just over $3 million. In 2012, September and October had 10 residential permits valued at $784,000 and three commercial permits valued at $55,000.

There are also four residential and one commercial permits pending approval.

The entirety of fiscal year 2012-2013 had 32 residential permits valued at $2.1 million and five commercial permits valued at $213,000.

Whitefish’s permits are showing considerable promise as well, according to the city planning department. This year, the city has issued 212 building permits so far, including those for single-family residences, townhouses, commercial projects, additions and multi-family projects.

Last year, there were 245 permits issued, and 204 in 2011.

All in all, potential development in the valley shows opportunity for growth, but not at an unsustainable rate, the planners agreed.

“We’re getting healthier,” Jentz said. “It’s a great change.”

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