News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
Growing Housing Means Growing Local Governments?
Madison Inselmann / Metrostudy / May 17, 2013
In a discussion last week with a friend who builds hospitals in Florida, she shared a story about a slow permitting process significantly delaying the progress of the latest in a chain of ambulatory health care facilities. They had three of the four permits required to proceed but the last one was anchoring them at a standstill. It was quite the relatable story. Around the country, as local markets begin the early, middle, or even late phases of their recoveries, local permitting processes have returned as a thorn in the construction industry’s side. Optimistically, I’m going to guess that it’s not a position in which they prefer to be. State and local governments, funded by tax revenues, usually trail the private sector into a recession and, therefore, find themselves playing catch up coming out of a downturn. It’s a product of their fiscal obligations.
As we enter into the home building industry’s selling season, let’s make a case for local government hiring for the sake of business development.
1) The Current Housing Stock is Appreciating (on average): While there is no such thing as a national housing market, the national average of home price appreciation is growing. Markets around the country are showing varying levels of home price appreciation as demand rebounds after years of anemic new home activity. The latest Case-Shiller Index showed a 9.3% growth in the average home prices for the 20 cities in their survey. At the same time, the last FHFA release showed a 5.5% increase on a national level. Higher home prices translate to greater tax collections [Listen for the collective groan from homeowners, like the audience does when a kid hits the baseball into the cameraman on “America’s Funniest Home Videos”].