Tupelo optimistic, despite housing slump

By Emily Le Coz/NEMS Daily Journal

TUPELO – The banging and clanging of the city’s once-thriving construction industry has lulled to a whisper in the past two years, but insiders expect a solid turnaround by mid-2012.
New home and commercial construction is down by roughly 50 percent since 2008. New multi-family dwellings dropped 100 percent during the same time, according to building permit statistics from the city’s Development Services Department.
Remodeling, additions and historic preservation also all fell.
Although the numbers are down, “I don’t think anybody should be thinking gloom and doom,”
said BJ Teal, director of the city’s Development Services Department. “I can’t help but be optimistic about things.”
Teal said some permit activity already has begun to rebound – especially additions and remodeling projects – and she expects a full across-the-board recovery in about two years.
Toyota’s new manufacturing plant near Blue Springs could spur new residential building, Teal said. And the city’s new five-lane road across west Tupelo is expected to fuel commercial development.
More construction will come through Teal’s implementation of a neighborhood revitalization program. It’ll entice builders to erect new homes in existing areas, thereby boosting surrounding property values.
In the meantime, though, contractors have felt the pinch.
“What few builders are doing anything, it’s custom work,” said Carl Renfroe of Renfroe Homebuilders and vice president of the Home Builders and Remodelers Association of Northeast Mississippi. “There is just not anybody building any specs – it’s all custom.”
Renfroe said he’s been blessed with work and expects Tupelo will recover quickly. But he admitted others haven’t been as fortunate.
“I’ve got guys calling, saying, ‘Please hire me,’” he said.
The numbers spell trouble not only for the area’s construction industry, but for the city’s general fund budget, 19 percent of which comes from property tax assessments.
Without new properties added to the tax rolls, the city’s collections stagnate. Two years ago, new construction added $15.2 million of taxable single-family property and $23.3 million of taxable commercial property. Six months into this year, those numbers were at $3.2 million and $7.8 million, respectively.
Permit fees paid to the city also are down about $110,000 this year – nearly half of the $225,000 that had been projected, said City Clerk Kim Hanna. The permits cover building, zoning, signage, plumbing, electrical and other items – all closely related to construction.
Those fees also go into the general fund.
But Tupelo’s not alone. Construction has slowed throughout Lee County, as it has nationwide.
“We’re coming to a slow stop,” said Brian Grissom, Saltillo’s building and zoning administrator. “We’re down to just three houses under construction right now and we were having 12-15 houses at any one time under construction two years ago.”
Grissom said the city has issued eight residential permits this year versus 21 last year and 54 three years ago. Commercial activity slowed from eight permits last year to two this year.
It’s the same story in Baldwyn, where most of the new construction today involves sheds or garages. The rest is just remodeling, said James Harris, the city’s building inspector and code enforcement officer.
“I think most of it is lack of money flowing,” Harris said. “People are out of work, they’re holding onto their money, just doing the necessary.”
Building permit activity has plummeted across the country, according to the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
Last year marked the lowest number of residential construction permits issued nationwide since the Census began keeping track in 1959.
Mississippi last year issued 6,995 residential permits – down from 11,428 the year before, according to the statistics.
Most people attribute the decline to the sagging economy, stricter lending rules and uncertainty about when conditions might improve.
On the bright side, said Renfroe, it’s a good time for people to build because the market’s ripe with eager contractors willing to make good deals. He also said that, despite the slowdown, he and others continue to find work in the area.
“I’ve been blessed, and Tupelo has been blessed,” Renfroe said. “We were smart about things, and as a result, we were one of the last to feel the slump. And we’ll be one of the first to recover.”
Contact Emily Le Coz at (662) 678-1588 or emily.lecoz@djournal.com.

Tupelo Construction Activity
Numbers of Permits
2008 (full year) 2009 (full year) 2010 (through June)
New single family housing 92 48 27
Single family additions 76 84 64
Single family access.* 75 88 27
Historic preservation 35 10 1
New multi-family 16 11 0
New commercial 29 23 5
Commercial additions 101 63 46
Pools 20 15 5
Valuation of Permits
2008 (full year) 2009 (full year) 2010 (through June)
New single family housing $15,279,970 $5,798,450 $3,256,550
Single family additions $1,287,182 $1,705,543 $1,446,750
Single family access.* $994,778 $908,475 $46,536
Historic preservation $258,000 $115,000 $250,000
New multi-family $13,280,000 $6,106,401 $0
New commercial $23,367,669 $27,766,042 $7,827,847
Commercial additions $30,110,450 $12,649,690 $6,325,889
Pools $519,329 $406,193 167,607
* accessory buildings, such as sheds, storage areas.
Source: City of Tupelo Development Services Department