What a difference a year makes
It’s time for the Tri-Cities Area Journal of Business’ deep dive into all things related to construction and real estate.
Readers will find the 64-page Focus magazine inserted in this month’s edition of the paper. It is a strikingly different publication than issue we published in 2020, when coronavirus shutdowns were altering the landscape. Online readers can access it here: tricitiesbusinessnews.com/construction-focus.
What a difference a year makes.
Last year, residential growth was booming against a pandemic backdrop.
This year, it is booming even more. In the first eight months of 2021, homebuilders pulled permits for 1,200 single-family homes, 200 more than a year ago. New and existing homes sell like hotcakes, fueled by low-interest rates, job growth and a continued shortage.
The change is even more striking in the commercial real estate sector which bore the uncertainty of the shutdowns as working-from-home schedules emptied offices and stay-home orders closed stores and restaurants.
In the first eight months of this year, local authorities authorized $440 million in non-residential work, about $20 million more than a year ago.
The $20 million difference hides a changing landscape. The big news in 2020 included the tail end of bond-funded school construction and a smattering of larger projects launched prior to the pandemic: cold storage in Pasco, a railside grain facility in Richland and Park Place apartment-and-retail project at 650 George Washington Way in Richland.
This year, it is a whole new ball game. The private sector is booming and permit activity is picking up. After deadline for the Focus magazine, Pasco authorized permits valued at more than $226 million for one project alone – distribution warehouses for Amazon Inc. near Sacajawea State Park.
Private investment is driving the surge with some of the biggest names in food manufacturing and retail making mid-pandemic commitments to the Tri-Cities. Costco Inc. is close to confirming its newest store. Darigold Inc. plans a milk drying plant.
Joel Bouchey of Inland Northwest Associated General Contractors said private investment is ascendant, at least, until local school districts launch new bond requests to keep up with a growing population – more than 300,000 these days.
In Washington, D.C., lawmakers are negotiating over the Build Back Better plan, a $3.5 trillion, 10-year infrastructure spending package that could turbocharge public investment in roads, bridges and a whole lot more.
The continuing housing shortage threatens one of the region’s key selling points, its affordable housing.
As Lola Franklin, president of the Tri-City Association of Realtors, said, homebuilders have their work cut out: “It’s not a crisis, but it is cause for alarm. Everyone is leaning on builders to build as fast as they can.”