Archive for Thursday, January 19, 2006

Housing starts down in 2005

Rebound predicted in De Soto as Arbor Ridge activity starts

January 19, 2006

The number of new home building permits issued in De Soto in 2005 decreased to its lowest level in nearly a decade, but the city should see a healthier new home market in the near future.

According to the De Soto building permit data 2005 report, the amount of permits pulled per year peaked in 2003 with 49. The number has steadily declined each subsequent year for a total of 33 being pulled in 2005.

However, Axiom Real Estate co-owner Dan Gulley, who is handling home sales in the 213-home Arbor Ridge subdivision, said he was optimistic the number of permits issued for single-family homes would increase in 2006 and 2007. The 43-home first phase of that subdivision has been approved, the first streets constructed and utilities brought to the site southeast of the Kill Creek Road on 83rd Street.

"This year, we hope to pull 20 permits," Gulley said. "In June, our model home is opening, so it only gives us half a year to sell. But the following year, we hope to pull 30 plus."

Gulley said he expected the first several permits to be issued in Arbor Ridge in January.

De Soto building inspector Steve Chick said he expects the home permits issued in Arbor Ridge to steadily increase.

"I expect we'll get permits on that," Chick said. "They have 43 plats available. I think in the next few years, hopefully, they will see more."

Gulley said two main factors contributed to the decline in the number of permits issued last year.

"The market did slow down last year," Gulley said. "We can contribute some to rising gas prices. Also, Timber Lake is really the only subdivision left with space."

There were three subdivisions active in the peak year of 2003, which saw construction hit its peak in Timber Trails and the final home construction in De Meadows.

Since that time, the 68-home Timber Lakes accounted for most of the housing starts in De Soto.

Faced with capacity limitations at the city's aging sewer plant, the De Soto City Council agreed reserve capacity for developments already approved and mete out the remaining capacity on a first-come, first-served basis unit a new wastewater plant in the West Bottoms was completed. Earlier this month, the council awarded a contract to build the plant and construction will take about a year.

Improvements on the sewer plant meant to bring it into compliance until a new plant is operating were performing well and should be able to handle the added load projected from new development this year, city engineer Mike Brungardt said.

The council is counting on new development spurred by the new wastewater plant to help pay off the $9 million bond financing its construction. The 25-year debt retirement schedule assumes system development fees from 75 new home permits annually, but that schedule is also backloaded with the expectation that numbers won't be realized in the first few years.

According to the permit report, the number of single-family unit permits pulled began to decline in 2003, the same year water impact and sewer impact fees were administered to permits.

Gulley said there were 18 plats left in the Timber Lake subdivision, making the new Arbor Ridge subdivision important an important factor in the new wastewater plant's early financing.

The city collected $159,000 is excise taxes from new development last year, $84,000 in water impact fees, and $51,000 in sewer development fees.

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