Signs of new life for homebuilding

The number of new home permits in metro Atlanta is at the highest level in five years as the homebuilding industry shows signs of life after being flattened by the recession.

Five metro counties that are key to the region's housing market — Gwinnett, Fulton, Cherokee, Forsyth and Cobb — logged sharp gains for the 12 months ended in March, according to an Atlanta Journal-Constitution analysis of data from the State of the Cities Data Systems.

INTERACTIVE MAP:  See how housing permits have changed in metro Atlanta

Gwinnett led with a 93 percent gain from the same period a year earlier, while Cherokee had a 78 percent rise in permits.

“We’re in a time when things are kind of waking back up,” said David Ellis, executive vice president of Greater Atlanta Home Builders Association.

The exception to the trend was DeKalb County, where new home permits declined slightly.

Homebuilding has long been a key component of the metro Atlanta economy, supporting a wide range of construction-related jobs and fueling retail demand as buyers outfit new homes.

The industry’s virtual collapse in 2007 and 2008 is cited as one reason the region’s jobless rate has exceeded the nation’s - though that gap has recently narrowed.

Permit numbers are still far smaller than before the housing bust.

“In the peak of our market we were doing 60,000 homes a year,” Ellis said. “In 2009 we did 4,000. With the recession the growth came to a roaring halt.”

In 2005 Cherokee, Cobb, DeKalb, Forsyth, Fulton and Gwinnett alone issued 35,627 permits for single family homes. In 2012 they issued 7,227, which was up sharply from 2011. For the 12 months that ended in March the number was 8,312.

“We’ve bounced off the bottom,” said Eugene James, Atlanta regional director of Metrostudy, a firm that tracks housing data and trends.

By Metrostudy’s measure, metro Atlanta is fifth in the nation for number of new single family housing permits as of February, according to Metrostudy. That’s actually down a couple spots from 2012, though, because other metro areas have recovered more quickly, James said.

As housing markets in other cities recover so people can sell their homes, growth in Atlanta will increase, he said.

The dropping number of existing homes for sale, and rising prices for those that sell, also help revive the new home market. Vacant homes usually fill before a region sees much increase in new construction, said Jim Skinner, a planner in the research and analytics division of the Atlanta Regional Commission.

While Gwinnett was No. 1 in construction growth, Forsyth had the most actual permit numbers in the past 12 months. Forsyth issued 2,060 permits for single family homes, up 64 percent from the previous year.

Pete Amos, chairman of the Forsyth County Commission, said most permits are in south Forsyth. While the economy is the main driver of home sales, he said, the county benefits from good schools, attractive neighborhoods and a cooperative county government.

“But we’re not looking to have that super growth that we had in the earlier 2000s,” he said. “A slow, sustainable growth is better for the county.”

Permits rose 78 percent in Cherokee. The county’s director of planning and zoning, Jeff Watkins, partly credits spillover from south Forsyth, where developers are running out of land. He also said developers are returning to land that was cleared for housing before the recession. Such lots are attractive because developers don’t have to convert raw land.

The story is different in DeKalb.

From April 2012 to March 2013 the county issued only 250 single family home permits, down 3.8 percent from the previous year.

There are two clear reasons, said James: There isn't room for much new construction in well-developed North DeKalb, while South DeKalb is burdened with foreclosures.

According to data from Equity Depot, 93,371 foreclosure notices were issued in DeKalb from 2007 to 2012. Only Fulton and Gwinnett logged more.

Builder Steve Palmer cited another factor: DeKalb government.

“They do everything in their power to impede you from building,” he said, citing long permitting times and “anti-McMansion” laws to limit construction of big new homes in older neighborhoods.

Luz Borrero, deputy chief operating officer for development in DeKalb, said the county is overhauling its permitting system.

“We recognize that we are in need of improving out permitting operations,” she said. The goal is a customer friendly “one-stop-shop” where residents and builders can get permits quickly.

Regulations limiting in-fill development are in place for a reason, she said.

“[The neighbors] don’t want developers to come in and alter the look and feel of the neighborhood,” said Borrero. “It’s a desire to preserve the character of the neighborhood.”

Cobb County has room for new housing. The community development director, Rob Hosack, said a lot of builders or other permit-seekers are optimistic and encouraged by rising sales of existing homes.

Palmer said even people who are not looking to buy or sell benefit from a healthy new home market. Construction improves the local economy, which means more people coming to the area and buying homes.

The cycle feeds itself, he said.

“Housing is really an integral part of the economy,” Palmer said, “not so much a reflection of it.”

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Permit push

County New home permits from April 2012 through March 2013 Change from prior year
Forsyth
2,060 up 68%
Gwinnett:
1,956 up 93%
Fulton
1,868 up 68%
Cobb
1,290 up 45%
Cherokee
888 up 78%
DeKalb
250 down 4%