Tri-City new home construction drops for third year

By Kristi Pihl, Tri-City HeraldJanuary 21, 2014 

The Tri-Cities saw a dip in home building for the third year in a row and Pasco relinquishing its claim as the fastest city for new home growth for the first time in at least seven years.

Overall, about 10 percent fewer homes were started in Benton and Franklin counties last year compared with 2012, according to recent data from the Home Builders Association of Tri-Cities.

A total of 1,024 permits were issued for Tri-City homes last year, with Kennewick and Richland surpassing Pasco.

New home starts in the Tri-Cities have been down since the federal first-time home buyer tax credit helped spark demand for homes in the second half of 2009 and the first half of 2010.

The tax credit, low interest rates and the Tri-Cities' relatively strong economy during 2010 with federal stimulus spending at Hanford were all factors that helped builders begin construction on about 1,531 single-family homes in the Tri-Cities in 2010.

In 2011, the number of permits issued for new Tri-City homes fell about 13 percent from the previous year to 1,332 homes, according to the data. The Tri-Cities saw another drop of 14 percent between 2011-12, when 1,143 permits were issued for new homes.

The Tri-Cities also may be returning to a more sustainable level of growth, local experts have said. The city of Pasco and the Pasco School District have struggled to keep up with demand for services with the rapid, record-breaking growth that hit Pasco during the 2000s.

Before 2000, there wasn't much more than a few soccer fields around Road 68 north of Interstate 182. In the years that followed, homes sprouted up in west Pasco and businesses clustered around busy Road 68.

The average number of permits issued for new homes in Pasco between 2000-10 was 627, according to data from the association and the city of Pasco.

Permits issued for new homes peaked in 2004 and 2005, when more than 1,000 permits were issued for new Pasco homes.

Still, more new homes are planned in the Tri-Cities, especially in Richland and Kennewick. More new residential lots were created last year than in 2012.

There were about 722 new residential lots created in Benton and Franklin counties last year, according to data from the Benton-Franklin Title Co. That's up 23 percent from the previous year. Of those, 336 were in Richland, 183 were in Kennewick and Pasco had 93.

Jeff Losey, the Home Builders Association of Tri-Cities's executive director, said in a statement, "We know that our housing market continues to be one of the strongest, but we are really hoping to see an increase for this coming year."

Pasco

Rick White, Pasco's community and economic development director, said a more normal rate of growth for new homes is about 1.5 percent a year.

He expects to see a similar number of permits issued for new homes in Pasco this year as the 203 homes started in the city last year.

The number of permits for new homes dropped 35 percent last year when compared with the 313 homes started in 2012, according to data from the Home Builders Association of Tri-Cities.

New subdivisions have been discussed, but White said there has not been any action yet.

Home builders have claimed that the reason Pasco is seeing a decline in new homes is because of a school impact fee the Pasco City Council adopted in March 2012.

However, White said more homes aren't being built in Franklin County. The county also has seen the number of homes built decline since 2011, down from 51 homes in 2012 to 33 last year, according to the data.

Kennewick

Kennewick saw the most new homes started last year, up 6.5 percent from the previous year to 277 homes, according to the data.

Evelyn Lusignan, Kennewick's customer service manager, said the city continues to see most of the growth and planning for new growth in the Southridge area.

But there have also been new homes added throughout Kennewick, she said. The neighborhoods of Grandridge Meadows, south of Center Parkway and Rainier Meadows, off of 25th Court, are almost full.

This year, new lots were created near Ridgeline Drive between Clodfelter Street and West Clearwater Avenue, where about 131 new homes are planned in the Canyon Ranch subdivision, Lusignan said.

A new Southridge subdivision is SouthCliffe west of South Sherman Street and north of Hildebrand Boulevard, where about 408 single-family homes are planned, she said.

Richland and West Richland

Richland and West Richland ended up seeing about the same number of homes built last year as they did in 2012.

Last year, 250 homes were permitted in Richland, which is eight homes fewer than the previous year. And West Richland had 135 homes started, which is three fewer than 2012, according to data from the Home Builders Association of Tri-Cities.

As it has been in the last few years, the lion's share of the growth has been in Richland south of the Yakima River, said Rick Simon, Richland's development services manager.

About a half dozen homes were started in Badger Mountain South this year, with more expected, he said. The first phase of West Vineyards in the development will have about 156 lots. In all, the full Badger Mountain South development will have 5,000 lots.

w Kristi Pihl: 582-1512; kpihl@tricityherald.com

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