New home permits in Tri-Cities climb

New homes continue to sprout up in the Tri-Cities.

Kennewick, Pasco and Richland all report the number of building permits for new single-family homes has picked up this year.

Pasco has seen the most new homes, and is on track to add about 500 this year. All three cities already have exceeded their totals for approved permits in 2009.

Hayden Homes, based in Redmond, Ore., has 140 new homes that received building permits in the Tri-Cities so far this year.

Deborah Flagan, Hayden vice president of sales and marketing, said 100 of those homes are in Pasco, 35 are in Kennewick and the other five are in Richland. The company also has started 50 new homes in West Richland so far this year.

The homes are priced from $119,000 to $300,000, Flagan said.

Flagan said Hayden has seen a steady demand. She credits it to the region's recreational activities, good schools and new businesses.

"People are willing to invest in their home because this is where they want to stay," she said.

Flagan said the company has noticed an increase in homeowners who want to move up to a larger home over the past three years. And the number of retirees choosing to move to the Tri-Cities also has increased in the past three to five years, she said.

As of last week, Pasco had already permitted 475 new homes, said Rick White, Pasco community and economic development director. Last year's total was 467.

White said about 400 to 450 new homes per year has been normal in the past decade.

Pasco will likely see 1,500 to 1,600 more people move to the city in 2011, he said.

White said new home permits were especially high in the first few months of the year, when the federal tax credit for first-time home buyers was in effect. Also, low mortgage rates could have influenced the increase in new homes.

"It was the right time for people to build," White said.

Flagan agreed that the first-time home buyer credit contributed to home purchases during the first four months of the year.

The Tri-Cities has also added jobs. Nonfarm employment increased by 3,600 jobs between August 2009 and August 2010. About 3,400 of them were in the private sector, with 200 more government jobs, according to the state Employment Security Department.

Rick Simon, Richland development services manager, said the Hanford stimulus dollars may have boosted the need for new homes.

As of Sept. 30, he said 275 new homes were started in Richland. Last year at the same time, 140 new homes had been permitted.

In fact, new home totals this year already have surpassed the 219 permits in 2009 and the 232 homes permits in 2008.

Simon expects Richland may reach 340 new homes by year's end.

Meanwhile, Kennewick had 262 new single-family homes that had been permitted by Sept. 30, more than the 248 permits in all of 2009, said Cindy Johnson, a Kennewick plans examiner.

That's a good year, she said.

The increase in single-family homes has increased the amount of permit revenue Pasco is receiving, White said. He anticipates the permits will bring in more revenue than the services cost, which means the city's general fund will receive the extra dollars.

In a good year, that's normal, he said.

White said the new homes mean added sales tax revenue. But after the sales tax revenue is gone, the new homes will need services that cost more than the revenue that they bring.

That's something the city and Pasco School District have struggled with.

The school district has added an average of 700 more students each year for the past decade, which is enough students to fill a new elementary school each year. The district has 15,127 students enrolled this month.

The Pasco City Council has made attracting more commercial and industrial development a goal. White said both those types of development broaden the property tax base, and unlike residential development, the income received from property and sales tax is more than the cost of services.