LOWNDES COUNTY — Contractors, and eventually their customers, can expect to see an increase in building permit prices purchased in Lowndes County, Valdosta, Hahira and Dasher due to the recent removal of the contractor discount on permits.
The decision to remove the discount during the new fiscal year, which began this month, was made in response to loss of sales and a gradually dwindling economy, according to Valdosta’s Community Development Department Director Mike Martin.
“We decided to give contractors a cut on permit prices three or fours years ago when the economy was in good shape and the department was able to do so,” Martin said. “However, with the shape the economy is in now, we had to lift the discount. The department has lost money for the past three years and we couldn’t continue to provide that price cut.”
The removal increases the price contractors have paid for permits in the past three years by 20 percent, Martin added. Martin’s observation of the permit sales is supported by annual building reports from Lowndes County, Valdosta and Hahira in calendar years 2007 and 2008. In ‘07, new residential permit sales averaged 75 monthly, new commercial permit sales averaged nine monthly and other sales averaged 243 monthly. Currently, new residential sales average 63 monthly, a 20 percent drop from last year, while new commercial sales average 10 per month and other sales average 209 per month, which is a 13 percent drop from 2007.
Home Builders Association President Bill Gaskins said he did not feel that the discount removal would have a drastic impact on local contractors’ operations.
“I haven’t heard any complaints from builders yet,” Gaskins said.
“I think that one of the main concerns would be that prices may continue to go up as the area grows.”
Carl Shapiro of Associated Construction Corporation said, “I don’t think the permit fees are really that exorbitant. However, I do feel that departments have created a huge surplus from the sale of building permits and it’s not really necessary.”
While several contractors agree that the discount removal may not have a negative effect on their operations, many have stated that the price increase will have to be passed along to their customers.
“When we have to pay more to build the house, we will charge more to our customers,” America’s Home Place General Manager Ben Polk said. “So ultimately, the increase in prices won’t really affect the builders; it will affect the customers.”
With the prices of fuel, food and other resources constantly rising, there is uncertainty as to whether the Community Development Department will be able to restore the discount in the future, especially with lowering sales averages.
“The department is thankful for the progress that we do have...the commercial business that we have maintained has sustained us through this hard time,” Martin said. “But we’re not over it, we still have a ways to go.”
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