Housing growth slows in St. John

Published 12:00 am Tuesday, July 29, 2008


Staff Reporter

LAPLACE – St. John the Baptist Parish issued nearly as many residential building permits in the first half of 2008 as it did all of last year, but the numbers are still far below average and indicate slowing growth just a year and a half after the parish reached an all-time yearly high in residential permits issued.

Through June of this year, the St. John Planning and Zoning Department granted 56 residential permits, just one shy of the 57 that were issued in all of 2007. But the parish appears unlikely to finish the year anywhere near its average of 241 permits over the last eight years.

“There’s no way we’ll hit 200 this year,” said Lou Vaughn, a manager at St. John Planning and Zoning. “We expect it to pick up maybe a little bit in the second half, but there are just so many houses for sale right now.”

Residential permits and the housing starts that follow are widely considered to be a reliable indicator of the state of the economy. Housing starts show that people have money or that they can – and aren’t afraid – to borrow it from banks.

Joey Scontrino, founder and owner of Landcraft Homes, the largest homebuilder in the parish, said people are staying put for the time being more out of fear than unfavorable pricing, describing current interest rates as “relatively affordable.”

 “When you turn on the TV and all you see is how bad the world is, nobody wants to spend a lot of money,” Scontrino said. “I don’t anticipate things to improve in the second half. I think they’ll slide further and I suspect next year won’t be as good as this one.”

The plunging numbers come just a year and a half after the parish recorded all-time highs in residential starts for 2006 as the area was rebounding from Hurricane Katrina. The 421 permits issued that year – including 148 in December alone – set a modern record for St. John. But those numbers were largely attributed to builders rushing to obtain permits before a stricter International Building Code was enacted in 2007. The rush in 2006 and new regulations were then blamed in part for a precipitous drop in 2007.

The inauspicious first half of 2008, however, was by no means limited to St. John, or the South for that matter. Residential building permits nationwide are down about 24 percent from this time a year ago, according to data released recently by the U.S. Census Bureau and the Department of Housing and Urban Development.

Neighboring St. Charles Parish, whose population is comparable to St. John’s, is also experiencing a slowdown. After issuing an annual average of 326 residential permits over the last five years, St. Charles granted just 58 in the first half of 2008. Officials say the same new building regulations that prompted the surge at the end of 2006 – St. Charles finished that year at 563 – are still slowing things down, but they aren’t the only culprit.

“The ailing housing industry nationwide and troubled mortgage market are some of the factors playing a role in the housing market slowdown in St. Charles Parish, but they are probably secondary influences,” said Steve Romano, development review planner for the St. Charles Parish Department of Planning and Zoning. “Our understanding is that there are other factors more directly affecting new home construction in St. Charles Parish.”

Romano pointed to the higher cost of building materials, newer building height requirements enacted by the Federal Emergency Management Agency, the cost of homeowners’ insurance since the storms and “permit fees going up astronomically because of us being charged with inspecting homes for IBC compliance.”

“Totally speculative but based on current trends, the permit activity will remain lower than in the past five years and gradually increase in coming years,” Romano added. “But it looks like the total for 2008 will be somewhere around the 2007 total, perhaps a little lower.”