By Rob Ollikainen
Peninsula Daily News
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Greg McCarry, a North Peninsula Building Association board member, said building permits continue to lag because of a combination of high unemployment, the cost of materials and permits, the potential impacts of the state Department of Ecology’s water rule for the Dungeness Valley and the gap between median home prices and the cost of building a new home.
“Some of the headwinds that are still there for the homebuilding industry in Clallam County, we still have to get over,” McCarry told a crowd of about 60 at the Port Angeles Red Lion Hotel.
“There’s still a large gap between the median price and the cost of new [homes]. It’s around 25 to 30 percent. It has to get down to 12 or 15.”
“Otherwise, the resale project becomes the best alternative, and it becomes too competitive for new home construction, which is an environment that we’re in right now.”
A combined 26 building permits were issued for Port Angeles, Sequim and unincorporated Clallam County in the first quarter of this year.
There were 34 new building permits issues for those areas in the first quarter of 2012.
“Overall, the county did 106 permits [in 2012] compared to 657 back in 2005,” said McCarry, president of Westerra Custom Homes. “That’s a huge gap.”
“The reason this is important is because homebuilding and construction represents about 30 percent of the economic activity in the county.”
While Puget Sound-area unemployment has dropped below 6 percent, the Clallam County unemployment rate has remained above 10 percent in recent months.
“The opportunity that we’re seeing right now for the homebuilders is the pickup that we’re getting from some in-migration,” McCarry said.
“That’s the only thing that’s making it work.”
McCarry said low interest rates are “probably the best thing going on right now.”
“That, I think, is a key driver in the market, and interest rates are still very competitive,” he said.
In a movement led by the building association, the newly formed Olympic Resource Protection Council is raising money to legally challenge Ecology’s water management rule for the Dungeness Valley.
The rule, which took effect Jan. 2, requires new water users to pay to mitigate the use of additional water from the Dungeness River basin by purchasing credits from a water exchange managed by the nonprofit Washington Water Trust. It also requires the metering of new wells.
Ecology officials say the rule is designed to protect water supplies for human consumption and fish habitat.
“There’s still a lot of uncertainty about the rule,” McCarry said.
The legal challenge is intended to remove “some of the onerous aspects” of the rule, he added.
Earlier in the meeting, North Olympic Peninsula Building Association Executive Director FaLeana Wech and board member Bill Roberds outlined the association’s involvement in the Home for Our Troops project.
The association aligned more than 60 businesses and individuals to help build a specially adapted home east of Port Angeles for former Marine combat infantryman who lost both legs while serving in Afghanistan.
Cpl. Ammon Lang will move into the home off O’Brien Road with his wife, Kiri, and their two boys, ages 4 and 2, when the project is completed in about five months.
“We are really excited to be a part of this project,” Wech said.
About 50 people, including the Langs, attended a groundbreaking ceremony Saturday.
Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at email@example.com.