New construction slow to pick up in the region

If building-permit activity is a true indicator of economic recovery, the Richmond region has a ways to go.

New construction remains at a crawl in the area's major localities.

The slowdown has afforded Chesterfield County, the region's largest bedroom community, some relief from the rapid residential influx of years past but is making the county's effort to balance its population with commercial growth more challenging.

Henrico County is seeing the same trends but with the luxury of an already strong commercial base.

So far this year, 376 building permits for new homes have been issued in Chesterfield, a 69 percent decline compared with the same time period in 2008. In Henrico, 267 home permits have been issued this year, a 51 percent decline from the same period in 2008.

Richmond and Hanover County have seen similar trends, although on a smaller scale.

"In the last year, we definitely saw a reduced trend in residential construction, and that's no surprise," said William D. "Bill" Dupler, Chesterfield's director of building inspections.

Even so, Dupler said, the number of businesses coming into the county remains relatively steady given the economic climate.

"We had a pretty strong year in terms of commercial, including the retail sector," he said, adding that work on the large-scale Watkins Centre development in western Chesterfield had much to do with that.

To date this year, the estimated construction costs for new commercial buildings in Chesterfield has been $60.8 million. Last year at this time, it was $120.2 million.

In Henrico, commercial construction costs have totaled $26.6 million so far compared with $116.6 million at the same time last year.

"Activity levels certainly aren't where they were, but we're currently seeing some revived interest in commercial," Henrico Planning Director Joe Emerson said.

Said Dupler: "I think the commercial sector is finding construction. If they have the financing lined up to do it, the prices are very attractive, and that's encouraging construction."

To speed up the recovery and encourage business growth, Chesterfield is exploring the idea of slashing planning fees for commercial projects.

If approved, the measure would reduce charges for office, commercial and industrial development applications -- which could run as high as $8,200 -- to just $200 until June 30 next year.

In November, Henrico decreased waterand sewer-connection fees for the same reason.

E. Wilson Davis Jr., Chesterfield's economic-development director, said there's promise that the county could land some major office and manufacturing additions in coming months.

"We're working with some nice clients and seeing some good activity," he said. "If some things fall into place and we see some additional shifts in the economy, I think we're in a very good position."

Chesterfield Planning Director Kirk Turner said he hopes housing soon will show similar signs of life.

"I'd like to see residential pick up. To my way of thinking, a 2 percent residential growth rate is healthy," he said, noting that a sharp decline in home-occupancy permits is evidence the county is well behind that pace.

Emerson said residential permits should pick up quickly when the economy turns around.

"As far as new rezonings for residential cases, we're not seeing those and haven't for some time," he said. "But we do have a number of projects already approved and ready."

Henrico building official Greg Revels said building permits shouldn't be considered the first sign of a rebound, as developers and builders will invest only after they regain confidence from elsewhere.

"It looks to me like things have leveled off," he said. "It's kind of like the market has reached equilibrium. You hear signs of optimism, and hopefully by the end of the year we'll see a swing back in the other direction and things will start improving more noticeably."

Contact Wesley P. Hester at (804) 649-6976 or .