New homes helped push 2016 Mid-Columbia building activity toward $1B mark

Residential construction helped propel Tri-City construction to nearly $1 billion in 2016. Here, homes are under construction at the southern end of Columbia Center Drive in western Kennewick.
Residential construction helped propel Tri-City construction to nearly $1 billion in 2016. Here, homes are under construction at the southern end of Columbia Center Drive in western Kennewick. Tri-City Herald

New home construction helped push the Tri-Cities toward the $1 billion mark in new building activity for 2016.

It’s a record written across the region in cranes, bulldozers and “for sale” signs.

The Tri-Cities Home Builders Association compiled every residential and commercial building permit issued by area cities and counties for the year. The total came to $951.5 million, 15 percent more than a year ago.

Jeff Losey, executive director of the builders association, credits home building with keeping construction crews busy.

Single-family construction accounted for nearly $400 million in construction activity in 2016, or 42 percent of the total value. Commercial construction — including schools, hotels, stores, manufacturing plants and a warehouse — totaled $552 million.

Area agencies permitted 1,390 single-family homes, 25 percent more than in 2015. The uptick tracks with growth in the residential real estate market.

The Tri-City Association of Realtors reported 4,423 sales closed in 2016, 6.5 percent more than in 2015. Over the same period, the median sale price rose 10 percent to $225,000, due in part to a low inventory of homes for sale. Home builders are stepping into the gap.

Single-family construction is running above the average of 1,200 to 1,300, with growth reported in almost every community. West Richland was the notable exception.

Pasco led the Tri-Cities with 387 home permits, 64 percent ahead of 2015. Kennewick issued 319 permits for single-family homes and Richland 271.

“I would never have forecast for Pasco to grow that much, but it did,” Losey said, observing that the barriers to development are lower on the Franklin County side of the Columbia.

“Pasco land has been easy to get into and it’s easy to develop. It’s sand,” he said.

Local building officials say they expect the residential boom to continue into 2017, and for commercial construction to keep following.

Richland recorded its best year in recent memory. Kerwin Jensen, community development director, said the 310 permits issued last year is well above the typical 250.

Growth is happening chiefly in south Richland, including the Badger Mountain South area, and some is happening to the north at Horn Rapids.

Jensen anticipates new applications for building sites in both areas in the coming year. Overall, he said home builders are being cautious about not creating a surplus of home sites.

“The developers aren’t coming in and getting ahead of themselves,” he said.

On the commercial side, Richland granted permits associated with Lamb Weston Inc.’s $200 million French fry plant, new development at the Vintner’s Village shopping center at Queensgate and additional industrial projects.

The announced expansion of Preferred Freezer Services’ massive commercial freezer in north Richland and the nearby rail loop promise to keep the department busy, Jensen said.

Like Richland, Kennewick tiptoed across the 300-plus home mark.

“That’s a good number for a community our size,” said Greg McCormick, Kennewick’s community planning director.

He notes the boom in single-family construction was accompanied by a jump in apartment development as well, particularly in the Badger Canyon area.

“Our residential market is really strong and indicative of the rest of the region,” he said.

Outside of new school construction, the Southridge area leads the way for commercial construction. Trios Southridge opened more than a year ago, and has helped inspire additional retail, restaurant and hotel development,

“There is just a lot of development going on in the community,” he said.

West Richland authorized 80 new homes in 2016, 40 fewer than the year prior.

Aaron Lambert, community development director, concurred with the home builder association’s Losey that demand is not the problem in West Richland. Home sites are in tight supply.

“The market is clamoring for more lots,” he said, noting that only 85 currently are available.

There are preliminary plans under consideration for subdivisions at Sunset Heights and Belmont Heights.

For West Richland, commercial construction is the headline. Double Canyon Winery, owned by California-based Crimson Wine Group, is building a 47,000-square-foot production facility, wooed by the city’s $3.1 million investment in a pretreatment plant for waste water generated by wine production.

Lambert isn’t concerned about a downturn in residential permits, he said. The department oversees the city’s code enforcement activities and is updating West Richland’s comprehensive plan. Processing fewer permits allows staff to focus on other priorities.

Wendy Culverwell: 509-582-1514, @WendyCulverwell