Atlanta’s home building, some retail sectors remain erratic, budget shows

By David Pendered

The home construction industry in the city of Atlanta remains erratic, and other market sectors are still shaking themselves out after the recession, according to a review of figures provided in Mayor Kasim Reed’s budget proposal.

The 131 Ponce apartment building rising beneath the cranes is to provide luxury amenities in the Midtown neighborhood. Credit: David Pendered

The 131 Ponce apartment building rising beneath the cranes is to provide luxury amenities in the Midtown neighborhood. Credit: David Pendered

The value of homes built in the city of Atlanta fell by 48 percent in 2013 compared to 2012. However, once all construction categories are included, the budget shows revenues from building permits are increasing steadily in the city.

The value of lumber sold in the city  plummeted during the recession. And lumber isn’t the only market sector that sank – and hasn’t recovered – in Atlanta during the economic reorganization that started before and continued after the recession.

Taxable sales of lumber were valued at $1.4 million in 2013. That’s down about $50,000 from the previous year, and way off the $14.2 million in taxable sales recorded in 2008, according to the budget proposal.

As car dealerships closed their doors, the taxable sales in the automotive section fell to $8.6 million in 2013 from $14.2 million in 2008, according to the budget.

Food sales remain depressed from prior years. The taxable sales of food was listed at $43.7 million in 2013. That’s down by 11 percent from $49.1 million in 2008.

Alcohol is one category that was not affected by the economic downturn. As the budget states:

  • “Alcohol consumption has tended to be inelastic and recession resilient.”
The Emory Proton Therapy Center (beneath the cranes) is expected to treat 2,200 cancer patients a year once it opens in 2016 near Emory University Hospital Midtown. Credit: David Pendered

The Emory Proton Therapy Center (beneath the cranes) is expected to treat 2,200 cancer patients a year once it opens in 2016 near Emory University Hospital Midtown. Credit: David Pendered

The value of residential construction fell to $145.2 million in calendar year 2013 from the $280 million in residential construction recorded in calendar 2012, according to the budget proposal.

In addition to the creating construction jobs, home building has a wide ripple effect. New homeowners tend to buy new furnishings, flooring, landscaping and security systems. Homeowners fueled the tremendous growth of retailers that cater to the do-it-yourself market, including Home Depot and Lowes.

In Atlanta, the number of residential construction permits the city has issued has varied rather dramatically since 2009. The variations include permitting for both new houses and new apartment buildings and townhomes. Here’s how the budget breaks down the numbers:

Houses, duplexes and pre-fabricated:

  • 2013 – 394
  • 2012 – 270
  • 2011 – 136
  • 2010 – 182
  • 2009 – 204

Apartment buildings, townhomes:

  • 2013 – 179
  • 2012 – 191
  • Building permit valuations2011 – 90
  • 2010 – 352
  • 2009 – 19

Atlanta intends to continue its efforts to make it easier to develop in the city by reducing the time needed to get a building permit, according to the budget.

The median time to get a permit for a house or duplex is now 30 days. That is the duration listed in 2012 and 2013, and is listed as the target in FY 2015.

Atlanta has set aggressive targets for commercial and multifamily permitting in FY 2015, according to the budget.

The goal is to provide a permit within 45 days for both categories. That would be an improvement from the median averages of:

Commercial permit:

  • 2013 – 100 days
  • 2012 – 90 days

Multifamily permit:

  • 2013 – 150 days
  • 2012 – 100 days.

Despite the downturn in residential construction, overall construction activity is on an uptick in Atlanta, according to the budget.

Revenue from building permits rose to $18.4 million from $10.7 million, in the fiscal years 2013 and 2012, respectively. The projected revenue for the current 2014 fiscal year is $14 million, and the numbers look good enough for the budget to propose $18.6 million in building permit revenues for the fiscal year that begins July 1.

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

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