QLI report: Construction continues to climb

constructionConstruction and land-use rates in the Pikes Peak region continued to climb gradually in 2012, illuminating signs of slow but increased growth and economic vitality in post-recession years.

The 2013 Quality of Life Indicators for the Pikes Peak Region show that, among other things, the health of the built environment in Colorado Springs is steady and appearing more optimistic than it has in years.

“We are all very pleasantly surprised to see some of how the economy is moving forward,” said Tim Seibert, who has served as the Built Environment chair for the QLI process and is principal at local design and development firm N.E.S. Inc.

The Built Environment section of the Pikes Peak United Way report covered primary economic indicators including land use, housing variety, building permits and vacancy rates. These elements come together to paint a picture of city, county and regional construction markets.

Land use numbers

Rates of total land use are up for the first time since 2009. Tracking land use shows how resources are being used and whether there’s a balance between land development and conservation.

Colorado Springs land use remained the same at 124,612 acres in 2010 before dropping to 124,608 in 2011 and picking back up to 124,705 last year. The categories that experienced increased activity in 2012 (all in acres) were:

• Residential, which was up to 31,729 from 31,532;

• Commercial/office/industrial, up to 9,632 from 9,581;

• Parks/trails/open space, up to 11,003 from 10,956.

The three categories that experienced decreased

activity in 2012 were:

• Institution, which was down to 11,849 from 11,882;

• Other, down to 20,337 from 20,338;

• Vacant, down to 40,155 from 40,419.

Land use rates for the categories of forest and military remained unchanged in 2012.

“After vacant land, the largest category of land use is residential, to accommodate the region’s population base,” according to the report, which added that the demand for vacant land is driven up by that population’s love of nature.

Total El Paso County land usage rates continued to remain level at 1,381,120 acres in 2012, showing the same numbers since 2010 and little change since 2005. Throughout the past decade, the report shows an increase in land development (primarily residential) and a decline in agricultural and vacant land use.

“Balanced land use is important for an area’s long-term well-being,” it said.

Building permits

The overall issuance of building permits saw a rise in 2012 as the demand for both residential and non-residential construction continued to climb from the pits of a recession-era housing market.

“I think we are seeing building permits starting to definitely trend upward in 2012 versus 2011 and 2010. I think that the growth model is tipping back,” Seibert said.

Single-family building permits in El Paso County have nearly doubled since hitting a low point of 1,349 in 2009, according to the report. But although that number continues to climb past 2,500 in 2013, Seibert said it is unlikely to reach its 2005 high of more than 6,000.

“I don’t think it will match where we were in 2005, but it’s clearly trending in the right direction,” Seibert said.

Joe Loidolt, president of Classic Homes and president-elect of the Housing and Building Association of Colorado Springs, agrees that another homebuilding boom may not be in the cards for the Pikes Peak region.

“There is always a potential for that, but I don’t see that happening anytime soon,” Loidolt said. “We think it will be a continued slow growth.”

The report also illustrates a vast increase to 2,242 permitted single-home residences in Colorado Springs, with 20 percent of building permits issued for multi-family construction. Because more families have access to home loans and other methods of financing, they no longer are forced to live in rented multi-family spaces. The issuance of multi-family building permits declined by about half in 2012 partly because of this comeback, according to Seibert.

“Residential construction has picked up this year over last year, and we’re anticipating that next year will be the same or better,” Loidolt said.

More positive news

Seibert said that another optimistic glimpse offered by the report is the decline in non-residential vacancy rates, which could eventually justify more commercial construction.

“We have a lot of buildings that were vacant that are getting backfilled, and once those get off the market, there will be more of a demand,” he said.

Although the current trend of non-residential construction is unimpressive compared to that of pre-recession days, the report shows an upturn of 170 percent of such permits issued in El Paso County last year following a gradual decline from 2008 to 2011. There was also a significant spike in Teller County non-residential permits.

Couple those figures with numbers from Colorado Springs and El Paso County as a whole, and one can begin to see prime indicators of growth and economic progress, albeit slowly, in the Pikes Peak region.

2 Responses to QLI report: Construction continues to climb

  1. How has the repeated disasters of the 14-months prior to the September floods impacted these trends and metrics?

    How have these trends and metrics been impacted after the September floods?

    Jim Coleman
    October 24, 2013 at 4:03 pm

  2. It is very good news that the economy is rebounding! However, not all construction is equal. We need to make the most of our existing infrastructure and focus on mixed-use developments to ensure that there are adequate tax revenues to maintain the infrastructure.

    Sprawling construction is bankrupting our local governments. For some background information on this, visit Economist, Charles Marhon’s webpage to get a breakdown of how much tax revenues are needed for routine maintenance of various types of infrastructure:

    http://www.strongtowns.org/journal/2011/6/14/the-growth-ponzi-scheme-part-2.html#.Um7lD_mkr1N

    Ang B.
    October 28, 2013 at 4:33 pm