Development drops off

The Baltimore Sun

Howard County issued its fewest number of building permits last year since officials began collecting data three decades ago, according to new figures that planners say don't include the steepest part of the recession.

In an annual development report, planning director Marsha S. McLaughlin said 1,157 building permits were issued during the year that ended Sept. 30, down from 1,899 the year before - a 39 percent decline.

"This is the smallest annual amount since 1979, the earliest year for which the Department of Planning and Zoning has permit data," McLaughlin wrote in the report, noting that development is expected to drop even more next year.

County Executive Ken Ulman said that the global downturn is affecting more than just builders and real estate agents but that Howard has suffered less than other places, and he predicted that the county will bounce back.

"One thing to recognize is that until the downturn hit, I don't think people fully realized the impact of construction on the county's economy," Ulman said.

If there is a silver lining, the county executive said, "it allows us to take a breath from some of the growth pressures we've faced."

Commercial development is also off, McLaughlin reported. Building permits for 1.4 million square feet of space were issued during the reporting period, compared with 2.2 million square feet the previous year, while the number of projects awaiting permits declined 47 percent.

The report showed the peak year for commercial activity was in 2004-2005, when 3.5 million square feet was built. The average for commercial projects over the past five years was 2.4 million square feet. The annual report is the county's way of tracking development since growth controls were enacted in 1992.

"We're seeing layoffs and a general decline of activity in the county," said Michael W. Harrison, government affairs director for the Home Builders Association of Maryland. "They're doing what they can to survive."

Despite the slump, McLaughlin, who was unavailable for comment on the report, wrote that the county is poised for a rebound whenever the economy recovers.

"There is a sizable amount in the planning pipeline," she wrote, noting that requests for permits for 7,557 residential units are moving through the county review process.

"When the economy begins to recover, Howard County will be in a very good position to construct more housing to take advantage of a growing employment base," she said. For instance, the county is expected to benefit when the federal military base expansion process begins to ramp up in 2010 and 2011.

Three-quarters of the units for which requests are in the pipeline are part of large projects, McLaughlin reported, including several along U.S. 1, at Turf Valley in Ellicott City, Maple Lawn in Fulton, and Riverdale, planned for Route 32 at Cedar Lane in Columbia.

Last year, 1,623 homes were built, but most were the result of permits issued the previous year. Of those, 263 were for buyers in 55-and-older communities, and 361 units were for the county's reduced-price housing programs.

Sixty percent of the permits went for construction in Elkridge (36 percent) and Ellicott City (24 percent), though the county's growth-control system, which parcels out building permits under a formula, has delayed construction of 302 homes in Elkridge, the county's hottest development area.

Columbia saw the smallest share of new units, with just 7 percent.

But if a proposed 30-year redevelopment of Town Center Columbia is adopted this year, that could change once the recession recedes.

Housing prices declined about 4 percent on average during the period but are still 30 percent higher on average than five years ago, McLaughlin reported.

The median price for a detached home was $525,000 in July, while townhouse prices fell to $337,000, and condo prices dropped to a median price of $252,100.

Perhaps because of those prices, only 28 percent of the new homes built were detached single-family units, the report showed, while 43 percent were apartments or apartment condominiums. The remainder were townhouses.

County budget director Raymond S. Wacks has noted a drop in real estate tax revenues, primarily recordation taxes collected on sales of new and existing homes, as one reason county revenues are expected to dip about $5 million under projections this fiscal year.

Total home sales dropped to about 3,900 last year from 4,900 the year before, the report said.

But Wacks sounded an optimistic note.

"We believe that the demand for Howard County housing is still there, and when the credit market improves and the economy recovers, so will these revenues," he said.

development decline

Howard County statistics for Oct. 1, 2007, to Sept. 30, 2008

* 1,623 housing units built

* 1,157 building permits issued (down from 1,899 the previous year)

* 7,557 units under processing review

* 302 units in Elkridge delayed by growth controls

* 1.4 million square feet of commercial space received building permits (down from 2.2 million square feet the previous year)

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