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Fewer houses, more businesses going up

Hall County Commission chairman is pleased with commercial growth

POSTED: April 19, 2008 5:00 a.m.
Tom Reed /The Times

Tony Childs of Catamount Construction Inc. works Monday on the new Hampton Inn going up in Flowery Branch. Commercial building permits within the county are up for the month of March compared to last year, while residential permits are down.

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Recently released building permit figures indicate residential building is down 63 percent in unincorporated Hall County so far this year, while commercial building is on a slight upswing.

Last year, 339 residential building permits were obtained from Hall County government from January through March, but only 125 were granted in that same time period this year, according to Hall County Building Inspection Services.

According to a report released by the U.S. Department of Housing and Urban Development in March, the number of estimated building permits obtained nationwide in February, the most recent statistics available, is 36.5 percent below February 2007 estimates.

But the local market isn’t all doom and gloom.

Hall County building permit figures also show that commercial building in unincorporated Hall County increased 14 percent from January through March of this year compared to last year.

Hall County Board of Commissioners Chairman Tom Oliver credits the commission’s diligence in promoting commercial development within the county as a factor in the commercial upturn.

"This commission has been very pro-active in business for the past few years. We’ve been working at it," Oliver said. "I’m excited that commercial (development) is moving forward because it offers jobs and a more diversified tax base.

"Our biggest fear is that we’ll become a bedroom community. Then you’ll have to depend on other areas to shop, have dinner and jobs — and I want that here, for people to work and shop within Hall County."

Oliver said the increase in commercial permits supports his goal to bring more commercial development rather than residential development to Hall County.

Oakwood officials also are working toward promoting commercial development on Winder Highway. And Flowery Branch developers are building the city’s first hotel. Also, developers are in the early stages of building a $15 million mixed-use development in the historic downtown area of Flowery Branch.

In Gainesville, both residential and commercial building permits were down substantially for the month of March compared to last year: Residential permitting was down 91 percent and commercial permitting was down 21 percent, according to Gainesville Building Inspection Services.

As a result of the slump in residential construction and accompanying loss in permit revenues, Gainesville city government has had to trim its 2009 fiscal year budget considerably. At this point in the budgeting process, the city expects to receive 20 percent less in revenue for building permits and zoning fees than initially budgeted for the upcoming year.

But some say the lull in residential construction might prove to be beneficial.

Despite common fears that a slowing home-building market may translate to a bleak outlook for Hall County’s economy, Frank Norton Jr., owner of Gainesville real estate company The Norton Agency, said the decline in residential building within Hall County is actually a good thing for the local housing market.

"We’ve been adding all these new houses under construction to what is already existing in the marketplace — that has stopped," Norton said. "Only a few new construction starts are happening in the county, and many of them are custom houses, not speculative construction. A lack of speculative construction allows our inventories to continue to shrink ... and you’re going to see prices are going to resume an increase by the end of the year."

Norton said that home sales in his firm have steadily increased since the early part of January. February sales at the firm doubled over January sales, and The Norton Agency sold more real estate in March than in February.

"We’re seeing the market slowly climb out. It will not be a sharp return to 2005 and 2006 levels, but a slow climb out of the excess inventory and a slow climb back to normal," Norton said.

Rosemary Noble of Gainesville’s C.D. Noble Custom Homes said her construction company is fairing well in spite of the generally dreary national housing market. She is currently overseeing construction of one custom-built home on Lake Lanier and two speculative homes in a Hall County subdivision that fall in the $400,000 price range.

"From August to February no one was looking, but in the last couple of weeks, we’ve had a lot of people coming to look at the speculative houses," Noble said. "So maybe things are turning around."

She added that home construction typically picks up during the spring months.

Norton said that affordable housing, particularly middle-class housing priced at less than $250,000, is selling "fairly briskly." He said upscale housing in the $1 million or higher range is selling at a slower rate.

With Census Bureau statistics released in late March estimating Gainesville as the fourth fastest-growing metropolitan area in the nation, Norton said Hall County could soon start to see some shortages of houses at middle-class price points.

Hall County Building Officer Lamar Carver said there are quite a few large residential projects in the works that have yet to be reflected in building permit statistics.

He pointed to the nearly 3,000-home Hagen Creek subdivision planned along Ga. 365 near Lula and to the 261-home Portofino development Hall County Board of Commissioners recently approved to be built on Lake Lanier.

"Even though it’s down from a year ago, growth is still pretty steady," Carver said.

He said that many developers have made long-term commitments to substantial well-managed growth in the area, although it may take 10 to 20 years for some of these large-scale projects to come to fruition.

"There will be good steady work going on here for some time," Carver said. "We’re weathering the storm better than a lot of folks."



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