A lot of people like to bitch about the home-building industry and the favors it enjoys from time to time. But like it or not, home construction creates jobs in the Pikes Peak region.
So when the recession silenced the drywall nail guns and churning concrete tubs, thousands lost their jobs; 31 builders have gone out of business in El Paso County since 2006.
Starting Feb. 1, a little help is on the way through a mini-stimulus package that offers 393 local builders $325,000 worth of credits toward building permits from the Pikes Peak Regional Building Department. (The average cost of a single-family home permit in 2010 was $725 to $750.)
"What we're trying to accomplish is, get a few houses started," Regional Building official Henry Yankowski says. "We don't know if we're going to be successful, but we felt we needed to try something."
A $700 payment here or there, of course, doesn't add up to much for most home builders. With that in mind, John Herzog, a former state legislator, former federal appointee in a branch of the Federal Emergency Management Agency, and lobbyist now living in Colorado Springs, says the money would be better used to lure a new company to town.
"As for the original proposal, if there is no demand for the homes now, are they going to build [speculative] homes based upon this relatively small incentive?" he writes in an e-mail.
But Yankowski says that's not the idea; he's up-front in saying, "I don't think for $700, they're going to start a home." It's more that the waivers might encourage builders to advertise properties more, or give home buyers a price break.
The credits work more like rebates than straight giveaways. The money, from Regional Building's $4 million reserve, was paid in years past by the building industry in permit and inspection fees, the enterprise agency's sole support. Now, explains City Councilor Scott Hente, a builder who might receive a small benefit, "It's rebating back to those people who have made an investment in this community and stayed in this community."
Among them are national home builders, such as Richmond American Homes, which will receive nearly $30,000 in rebates, and Pulte Homes Corp., which has been assigned $32,358 in waived fees, among the highest amounts given.
That's because rebate figures were computed based on the number of building permits obtained by each builder between January 2005 and November 2010. The rebate calculation also took into account each builder's tally of "failed" inspections — work that was rejected the first time. Those with lower fail rates got higher rebates.
The program, which Yankowski believes is unique, was the brainchild of Regional Building officials, not the housing industry, although the Housing and Building Association of Colorado Springs supports it.
The recession has choked the construction industry; single-family home permits have taken a dive, from 3,900 in 2006 to only 1,618 in 2010. Since January, 120 single-family permits have been issued.
The losses are reflected in Regional Building's own roster — 41, or 36 percent, of its workers, have been laid off since 2006. (It hired a few people last year to handle 23,000 re-roofing permits, 3.5 times the normal number, triggered by hailstorms.)
The biggest local windfall goes to Elite Properties of America (Classic Homes), which is getting $43,279 in free permits. But even that much might not light a fire, says president Joe Loidolt.
"We still have to have buyers," he says.