Residential real estate continues to boom across Connecticut and new construction is no exception. New housing permit activity jumped about 55 percent in March compared with March 2003, the state Department of Economic and Community Development announced last week.
Cities and towns in Connecticut authorized 929 new housing units in March, up from 600 during the same time last year. The year-to-date change is not so dramatic: In the first quarter of 2003, cities and towns approved 1,683 housing units. In the first quarter of 2004, municipalities in the state approved 2,176 units, an increase of 29 percent compared with the same period in the prior year.
The increase would have been evident earlier, said Barry Rosa, Prudential Connecticut Realty’s new homes and land director, but the permitting process in many towns can take years. The residential real estate market has been hot for about five years, particularly for the last two, and many developers wanting to capitalize on that with new construction started working toward obtaining a permit years ago, Rosa said.
“In all honesty, if a builder has a piece of land today Â… to do 25 condos Â… it’s probably a minimum of 18 months to be approved,” he said.
New single- and multi-family housing developments have been selling at fast rates, Rosa said.
“The bottom line here is Â… the market could have handled more new product,” he said.
The short-term increase is especially noticeable along the shoreline and in Fairfield County. March 2004 permit activity increased about 88 percent in Fairfield County compared to last year, according to the DECD. Year-to-date activity in the county is up by about 43 percent. Activity in Middlesex and New Haven counties also increased in March, although the year-to-date difference was more dramatic. In Middlesex County during the first quarter of 2003, 137 permits were approved. During the first quarter of 2004, 240 were approved, representing an increase of about 75 percent. In New Haven County, cities and towns approved 245 new permits during the first quarter of 2003. During the first quarter of 2004, they approved 376, an increase of about 54 percent.
The increase in Fairfield County could be significant. The county has seen decreasing numbers of new permits for the past several years, mostly because of the lack of available land, Rosa said.
“It’s finally coming around,” he said.
Most of the county’s activity has been in the Bridgeport labor market, which stretches west to Fairfield, east to Milford and north to Beacon Falls and Oxford, where housing permits for the first quarter of 2004 were up by 128 percent compared to last year, and in the Danbury labor market, which includes northern Fairfield County and southwestern Litchfield County, where activity was up by about 71 percent during the same period.
Although the labor market statistics include some cities and towns that are outside of Fairfield County, most of the communities that awarded large numbers of permits in March were in Fairfield County.
Norwalk was one of those. Norwalk, a coastal town of almost 90,000 people, awarded new permits in March for eight single-family homes and two condominium complexes. One of the complexes will have 14 units and the other will have 54, according to the city’s Code Enforcement Office, which issues new permits. That brings up the number of new units the city authorized to 76, a large jump from the 24 handed out in March 2003. The number also is an increase from February 2004, when the city awarded permits for 24 new units.
So far this year, Norwalk has awarded permits for 126 new units, the highest number in the state.
Commission Concerns
Real estate agents expect the increase in new construction will continue, but Mike Sexton, vice president at H. Pearce Real Estate, worries that pending legislation could affect new construction.
The state Senate late last month approved a bill that would extend the jurisdiction of municipal inlands wetlands commissions. Currently, wetlands commissions can impose regulations only on wetlands themselves. The original bill would have extended their authority to any land where wetlands-related wildlife resides or where construction or work on the land would affect the wetlands.
The Senate amended the bill before passing it to widen the wetlands commissions’ authority to areas where construction could affect a nearby wetland, but deleted the part about wetlands-related wildlife, according to the state General Assembly Web site.
“A municipal inland wetlands agency shall not deny or condition an application for a regulated activity in an area outside wetlands or watercourses on the basis of an impact or effect on aquatic, plant, or animal life unless such activity will likely impact or affect the physical characteristics of such wetlands or watercourses,” reads the new bill.
The state House of Representatives was scheduled to discuss the bill, but at present it remains unclear whether it would do so before the end of the current session, which was set to close shortly after The Commercial Record’s press deadline on Wednesday.
Sexton worried the bill could affect new construction because most usable land left in the state has some wetlands on the parcel or is near wetlands, he said. Even with the amendment, the bill would give wetlands commissions more power.
That could work out fine in some communities, Sexton said, but in others, wetlands advocates are sometimes over-zealous and this could be a tool to stop all development, he said.
Sexton’s colleague, Cash Mitchell, also a vice president at H. Pearce, also expects new construction to continue at a steady pace. The pair recently gained approval for a 16-lot subdivision of single-family homes on the west side of Guilford. Mitchell is confident the sales of the lots will go well. Lots will command prices between $275,000 to $300,000 and the homes that are built will likely be $500,000 to $1 million homes, Mitchell said.
Their subdivision also characterizes a trend that has been commonplace on the West Coast and is now moving to the East Coast, Mitchell said. It started with waterfront properties being redeveloped or torn down altogether to make way for new ones and has since moved inland, Mitchell said. Their subdivision is an example of that: It is a couple miles away from Long Island Sound, but the pair still expects it to sell well.
Mitchell believes the market for new construction will be stable until the elections in November.
“After the election, only God knows. We’ll see,” he said.
