February 6, 2008- The number of building permits issued for new residential units in Utah dropped by 22 percent in 2007, the biggest decline in more than two decades, according to new data released today by the University of Utah’s Bureau of Economic and Business Research (BEBR). The total number of dwelling permits issued in 2007 was 20,535 down from the 26,322 in 2006. New single-family units, which accounted for about two-thirds of all new dwelling units, declined at an even faster pace, dropping from 19,900 units in 2006 to 13,500 units in 2007, a decline of 32 percent.
“This decline in single family homes is the largest one year drop since the 38 percent decline in 1980,” said BEBR Director Jim Wood. Lehi City was particularly hard hit by the contraction. In 2006 the city led the state in new single-family construction. In 2007, new home construction in Lehi dropped by 60 percent, falling from 1,519 single family units in 2006 to 641 single family units in 2007.
In contrast to the single family market, the condominium and apartment markets experienced increased new construction activity. Permits for new condominium units increased from 3,353 units in 2006 to 3,801 in 2007, a 13 percent increase. New apartment construction increased from 1,427 to 1,757 units, up 23 percent over 2006. Nevertheless, apartment construction remains at very low levels statewide. In Salt Lake County only 916 new units received building permits, an extremely low level of activity given the high demand for rental units, low vacancy rates and rising rental rates. Salt Lake County currently has an inventory of 100,000 rental units.
The value of nonresidential construction is nearing record levels. In 2007, the value of permit-authorized nonresidential construction totaled $2.05 billion. This is the second highest year in inflation-adjusted dollars, exceeded only by the $2.2 billion of 1997. The largest permit-authorized nonresidential project in 2007 was the IHC Riverton Hospital at $80 million, followed closely by the $79 million permit for the new Hamilton Partners office tower in downtown Salt Lake City.