A LOOK BACK AT THE HISTORY OF BUILDNG PERMITS IN CONNECTICUT

Another troubling trend is the lack of building permits in Connecticut. This area just follows the other economic realities in the state. One agent recently lamented that in his town, Old Saybrook, there has not been one building permit for all of 2023 and into 2024.

One factor might be the higher cost of construction loans. Where mortgages are currently running around 7%, construction loans can cost 14-15%. Even in a buyer’s market there are risks that construction companies must consider. Public house builders like DH Horton and Toll Brothers have reported on having to incentivize buyers. This puts builders in a tough spot. High interest rates, concessions to buyers, and they still manage to eake out a profit? Amazing.

Below is data compiled by the Connecticut Department of Economic Community Development. It covers building permits all throughout the state from 1990-2022. Isolated from the main list are the columns below which show the dramatic decline in the number of building permits across towns. The selected data covers the overall state and several towns. The main list shows that in 2008-2009 there was a dramatic drop off in building permits. A subsequent article will take a closer look at these numbers. The bottom line is that there was a 45% drop while the nation’s economy continued to grow. Moreover, if you accept that the Connecticut economy grew over that time, and the population grew over that time, how do you explain such a drop in construction?

. Table 1 below show the inflection point in time where the number of permits went through a major decline.

TABLE 1

SUMMARY OF CONNECTICUT BUILDING PERMITS – 2005 – 2011

(Units)