Building Department optimistic about construction rebound

This house is being built in Arnold by San Andreas-based contractor, John Rapetti.

Weak demand for new construction since the housing collapse has left many builders without work over the past five years, but low permit fees in Calaveras County and an increase in consumer confidence may mark the beginning of a construction rebound.

In 2005, Calaveras and Amador counties were riding the crest of a prosperity wave with permits for 290 single family houses issued in Amador and more than 700 in Calaveras.

That all changed in 2007 when the housing market collapsed. By 2011, building department officials from both counties witnessed the lowest recorded number of building permits issued for new homes in decades. That number slipped below double digits in Amador, and only 30 were issued in Calaveras.

“It took us all year to do what we would do in the month of January alone when we were riding the crest,” said Calaveras County Building Official Jeff White. “Literally we would issue 20 to 30 permits in one month alone. Then when things fell apart, it would take a year to do what an off month was producing.”

After the most drastic new construction decrease in recent memory, the trade is only now starting to pick back up.

To aid the beginning of construction recovery, Calaveras County has kept fees low for obtaining a building permit – especially when compared to its northern neighbor.

“The trend looks encouraging now,” White said. “The Bay Area is getting little busier, and we’re usually about year behind them.”

Lower fees in Calaveras give it a leg up over Amador.

“I asked for a permit for a house and got an estimation of what the cost to build in Amador and in Calaveras would be,” said West Point contractor Dennis Adams, who has been building houses for more than 20 years in both counties. “In Amador it was $23,000 for all the fees and it was around $11,000 in Calaveras. It just doesn’t seem like (Amador County) encourages building new houses there.”

In Calaveras County, the largest chunk of permit fees for a new house is funneled to school districts, which receive about 35 percent. The other two significant portions go to Public Works for road maintenance and to the Building Department to pay for employees who collect and assess the permit itself. It is a process that Paul Bramell, a contractor out of Pioneer, calls “buying into the county.” Bramell believes the “buy in” price of the county is so steep it hinders new construction.

“Really what’s happening is we don’t have the jobs that reflect those types of higher fees that are not in the adjoining counties,” he said. “It’s not justifiable.”

One aspect of permit fees in Amador Bramell believes to be unjustifiable is a $4,300 county Park and Recreational Impact fee that he said was introduced about six or seven years ago during a boom in the building economy. This fee and a $3,200 county facility fee are absent in the Calaveras County permit fee structure. A road-impact fee costs $2,000 more in Amador than Calaveras, and a larger amount of money goes to the Building Department. When it’s all said and done, the permits costs are about $10,000 less in Calaveras, which impacts employment in the county.

San Andreas-based contractor John Rapetti paid $14,985 for a permit to build a new house in Arnold. If the fees had been $10,000 more, he doesn’t think the project would have gotten off the ground.

“I probably wouldn’t build it (if it cost that much more),” Rapetti said. “The fees are so high now with all the new state rules and regulations. It makes it really tough.”

Calaveras County Building Official Jeff White believes that along with the general contractor and government, many other workers benefit when a house is being built.

“In my personal experience as a general contractor, I would hire one or two carpenters and then you have plumbers, one, two or three electricians – you’ve got the sheet metal man, one or two insulators, painters and the sheetrock guy,” White said. “(When a house is being built) sub-contractors are being kept busy too. All the trades benefit.”

But when times got tough, the Building Department was cut to the bone because of how its funded.

“The department is funded by permit revenues,” White said. “We don’t take general fund money. We are a revenue neutral department.”

“A lot of people think we are running on tax money,” he continued. “No. I work hard at trying to dispel that notion.”

After the housing collapse, about 10 employees lost their jobs at the Building Department.

“We lost four or five inspectors and a plan-checker,” White said. “What that left us with was barely enough to function. I’m worried that if we start picking up, we’ll be behind the curve of trying to keep service up.”

“Code Compliance is a whole other story,” he said, referencing a department within the Building Department. “We have some illegal building going on, and we’d go after that first with more employees. Until then violations relating to health and safety take priority.”

“The other stuff, like somebody doesn’t like a sign or something like that, with a 1,150 case back log and two officers, it’s just not feasible.”

Unfortunately for tradesmen and government workers, the last few years in the county have seen record lows – a problem White attributes by a glut of cheap houses on the market and rising permit fee prices.

“Aside from permit costs, the suppressed (construction) industry is also something to consider. There’s an inventory of foreclosed homes,” he said. “People who want to build change their minds about doing that because it takes about six months to do and then you need to bring the house up to code. They can just buy a house in foreclosure for less money than it takes to build and (Code Compliance) is all done.”

Although the suppressed industry still faces a foreclosed home inventory that dissuades buyers from investing in new construction, White is hopeful the market is looking up.

“We are seeing a trend in more home permits,” White said. “People want to start building now because the inventory (of foreclosed homes) is smaller. We are heading in the right direction. We’re guardedly optimistic.”

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