Economic Slump Hits Building Market

Codes Enforcement Director Bill Cox


 Building Permits Down, Building Fees Down!


By: Pat Hunter

July 15, 2008


For some time now, county officials have painted a rosy picture about the local economy and building construction. Permit numbers may be used to gauge or track builder confidence in the market. However, at Tuesday’s July 15th Loudon County Regional Planning Commission meeting, planning commissioners received some bad economic news.


Codes and Building Inspector Bill Cox gave his monthly report with some not so good numbers. Loudon County’s economy is suffering from the housing slump as evidenced in Cox’s report.


According to Mr. Cox, last month Loudon County issued 49 building permits, which represents an 18% decline over the previous month. There was a 33% decline in fees collected and a 34% decline in the value of construction. Until recently this was not true but now Loudon County is seeing an economic slowdown, Cox disclosed. Matter of fact, we may be seeing more of a slow down than previously realized in looking at some numbers, Cox added.


Building Inspector Cox then shifted his building stats to the first six months of the calendar year compared to the first six months of last year. Permits are down 12%, fees are down 11½ % and values are down 3.6%.


Cox also spoke about the fiscal year, which just ended June 30th. His news was bleak, “permits are down 37%, fees are down 52% and values are down 49%. He reminded planning commissioners about the “fiasco” when builders and individuals rushed out to get permits to avoid from being assessed and paying the Schools Adequate Facilities Tax on new residential building and development. Cox commented that the numbers shouldn’t be compared to apples to apples or apples to oranges because of the Schools AFT situation.   VIDEO CLIP 1 Permits  


The Schools Adequate Facilities tax was meant to generate revenues for schools to help pay for new school construction rather than placing the entire burden of new schools and infrastructure on existing taxpayers. The Schools Adequate Facilities Tax is not collected at the time of permit issuance so the tax remains a liability until the tax is collected.


With over $5 Million in ending fund balance in County coffers, it's next to impossible to satisfy Commission's and School Board's enormous appetite for spending because they now want voters to approve another tax, a $50 Wheel Tax for school construction!


This fiscal year, the fees that were collected were $261,000+ and another $1200 for building permit fees and $1200 for Board of Zoning Appeals (BZA) fees that the Building Codes Department had collected. Another $19,722 was collected in plan review fees for a total of $282,000 + this fiscal year, which was down from the $144,000. Cox blamed the AFT situation, where people were rushing to get permits to avoid paying the tax.


Building Inspector Cox spoke about Loudon County’s estimated Adequate Schools Facilities Tax (AFT) “liability” for this past month, which was $48,800. For the county and cities, it was $55,484. The AFT total for this past fiscal year, from July 1, 2007 to June 30, 2008, was $678,881 for the County; $934,000+ for the county and cities. Cox said that it couldn’t be compared to the last fiscal year because the County collected or created a “liability” for $498,000.  But last fiscal year, as far as this tax was concerned was only for 6 months, which was the first part of last calendar year so if you double that it’s almost $1Million verses a little less then $700,000 this year. Planner Russ Newman asked Cox if he knew how much money had actually been collected from the Schools Adequate Facilities Tax but Cox said that he did not know. Cox completed his report by saying that the County had conducted 241 inspections last month.  VIDEO CLIP 2 AFT  


Loudon County Building FY 2007-2008 (07-01-2007 to 06-30-2008)

Building Permits: 37% down

Building Fees: 52% down

Building Values: 49% down