How high demand has pushed up prices and left developers looking for workers to hammer the nails and land to build on
As residential housing throughout St. Charles Parish continues to expand, local developers are facing a slew of problems heading into the New Year as they attempt to accommodate the sudden and continuing housing needs of residents since hurricane Katrina ravaged southeast Louisiana.
Even though the number of residential building permits applied for in 2006 was at a 20-year high with 564, 61 percent of those permits were issued in the final three months of the year.
The factors behind the late push for building permits in the latter half of 2006, which eclipsed the 2005 mark of 255 residential permits issued, are most likely due to mandatory inspections and stricter building codes imposed by the parish beginning Jan. 1.
St. Charles Parish Planning Director Michael Henderson has noted that it was not simply the rush to beat tougher building codes that caused the abundance of housing permit applications at the end of 2007.
Many good jobs and people relocating back to the area after being forced out by Hurricane Katrina have also been important factors in the St. Charles growth spurt, according to published reports.
Homebuilder Joe Scontrino of Landcraft Homes said he isn’t surprised St. Charles continues to expand at such a rapid pace. In fact, the demand is actually similar to the business he was experiencing before Katrina. Increases in the prices of all aspects involved in building a home from land to labor and materials are factors in the rising price of building and buying a home.
“In the last year the cost of land alone has increased considerably,” Scontrino said. “In that same time frame, the cost of purchasing a home has increased about 18-22 percent.”
Regardless of the price hikes, Scontrino said the major obstacle keeping him from building more homes in the St. Charles area is the lack of available land in which to build on. He has already seen much success with Landcraft’s 2,200-lot Ashton Plantation subdivision, with houses popping up faster than basic utilities are available.
Landcraft’s Highland Oaks subdivision, still under construction in St.Rose, was something the company had originally planned to market to young professionals with children who work in the areas between New Orleans and Baton Rouge looking to take advantage of the St. Charles public school system. The company is seeing more interest in those homes from residents in the New Orleans Metro area who lost their homes in Katrina.
While some developers are moving so fast they can hardly keep enough skilled labor employed, others are still trying to recover from money lost from the ever increasing cost of building a home.
Inflation associated with home building costs over the last year and a half forced homebuilder Gary Hartley, owner of Kreative Kustom Homes, to lose money while trying to honor contracts they had made prior to Hurricane Katrina.
“We took a $20,000 lick on each house but we honored the prices we quoted people,” Hartley said. “We’re in pretty good shape with 15 or 20 houses already on the books to start, but we took a bath last year.”
Hartley said that along with the increase of materials and labor, theft of everything from cabinets to copper tubing is also driving the price of construction up.
Hartley said he’s lucky to have a core crew of workers that he can depend on which keeps the company’s needs for skilled labor met at nearly all times, but the availability of materials, or lack thereof, has seriously slowed down the time frame it takes for him to build a house.
“It’s taking us at least an extra month to finish a house,” Hartley said. “We have to start ordering the materials as soon as we pour the concrete. Everybody needs their windows and doors, especially now.”
Homebuilder Randy Noel of Reve Construction is pleased with the amount of business his company has planned for 2007, but can’t help but wonder what the future holds if wages don’t stay consistent with the price of buying a home.
“A house that cost $180,000 pre-Katrina will cost you $230,000 now,” Noel said. “Wages have increased but not fast enough to keep up with cost.”
In the final months of 2006, Noel said, many houses in St. Charles had become available but were sitting on the market, possibly due to the lack of funds from buyers. In the last month, many of the same houses have been sold, but Noel attributes that to residents receiving government help in the form of Louisiana Road Home grants which cover up to $150,000 in flood causes losses.
“We’re getting a pretty good push on selling homes again because people are finally getting money from Road Home,” Noel said. “Well, that’s great for 2007, but what about 2008?”
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