Yellow Pages
New construction figures from the Skagit County Assessor’s Office indicate the development boom of this decade appears to be over, at least for now.
The value of new construction in the county this year is $390 million, the Assessor’s Office reported on Thursday. That’s down 38 percent from last year’s record-breaking $632 million.
This year’s figure is an estimate, but Chief Deputy Assessor Wes Hagen said he doesn’t expect it to change much. This is the lowest value for new construction since 2005 but still the fourth-highest amount ever.
“The bottom has not totally fallen out,” Hagen said.
The number has been propped up to some extent by the completion of construction projects begun in previous years, Hagen said — before the downturn in the housing market and the broader economy.
Contributing to the more than $600 million in new construction in both 2006 and 2007 were large projects such as the Sierra Pacific lumber mill and renovations at the refineries. This year, no large projects contributed to the total, Hagen said. The new Janicki manufacturing plant in Hamilton added $8 million of value, he said.
Jeff Hansell, a partner in Hansell Mitzel Homes, a residential and commercial builder, said the past two years were “outliers” and not part of a long-term upward trend that he believes will persist.
“I don’t think we’ll ever see us getting to the number of homes and the number of construction projects that we’ve seen, but I do see positive things for the county,” Hansell said.
While the worst of the slump might be over, Hansell said, it may linger into next year.
“There’s been so many people who have chosen to stand on the sideline or who have been required to stand on the sideline because of the lack of available financing. We could see some hangover into next year,” Hansell said.
Even so, he advised against seeing the glass as all empty.
“We all tend to talk in absolutes, but there are still homes being sold. People are still expanding businesses. We’re still seeing new construction projects happening — granted, it’s at a much slower pace than recent years,” Hansell said.
New construction is a crucial part of the county’s budget because it is taxable property that is not subject to a 1 percent limit to property tax increases.
New construction in 2008 will generate an estimated $470,000 in property tax revenue for the county in 2009, based on this year’s levy rate. That’s 2.4 percent of the overall property tax collected by the county this year, on top of the 1 percent county commissioners are allowed to add.
In the past two years, the value of new construction has been high enough to add about 4 percent to the total property tax rolls, which went further toward covering contracted wage increases.
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