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Building permits picking up for new homes in Fargo-Moorhead

Work continues Wednesday on the five-story apartment and retail complex along First Avenue and Roberts Street in downtown Fargo. (David Samson/The Forum)1 / 2
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FARGO - Permit applications for new-home construction are starting to pick up in the Fargo-Moorhead metro area after flooding and the ongoing recession paralyzed the industry during the first quarter of 2009.

Local building officials say it's a welcome sign, given that permit numbers so far this year are well below last year's figures.

For example:

* From January to March - usually the month homebuilding ramps up for the season - no building permits were issued for new single-family homes in Fargo or Dilworth. Moorhead issued two permits and West Fargo issued one.

* When comparing April 2008 to last month, the number of single-family home permits dropped from 21 to 12 in Fargo, from 27 to six in Moorhead and from 17 to 10 in West Fargo.

* As of Wednesday, Fargo had issued 30 permits for new single-family homes this year - a 44 percent decrease from the same period last year.

There are a couple of bright spots: The number of multifamily units being built or pending permit approval in Fargo is up, and permit applications in general have been on the rise recently, officials say.

This spring's flood fight basically brought building to a standstill, said Jason Eid, president of the Home Builders Association of Fargo-Moorhead.

"The whole city just kind of went on pause during March there, and so we're picking up steam again," he said.

While the flood "certainly had an effect," local homebuilding was already on the decline before flood season, Fargo Planning Director Jim Gilmour said.

From Sept. 1 to Dec. 31, the city issued 60 permits for single-family homes, compared with 112 permits during the same period in 2007, he said.

Still, the flood fight didn't help matters, tying up contractors for weeks.

"If you had a backhoe, you weren't digging basements. You were digging dikes," Gilmour said.

Dike removal continues in the metro, but home-building is back on the front burner, too, as permit numbers show.

"May has really picked up," said Dawn Fuxa, building codes office specialist in Moorhead. The office has received at least 20 permit applications in May, including eight on Wednesday alone, she said.

Fargo issued a dozen single-family home permits in April and had issued 18 in May as of Wednesday.

West Fargo also has seen permit traffic increase in May, with 44 total building permit applications. Carol Wendt of Moore Engineering, which processes the city's building permits, said West Fargo's housing sector should benefit from the added protection of the Sheyenne River diversion, which kept the city safe this spring as Fargo and Moorhead scrambled to hold back the Red River.

Apartments and twinhomes, two areas of the housing sector that have traditionally been strong in Fargo, have showed positive signs.

Through Wednesday, the city had issued permits for two multifamily projects this year totaling 164 units, compared with four projects totaling 130 units during the same time last year. One of this year's projects is the downtown Cityscapes apartment-retail project, which will add 104 apartments units.

Gilmour said permits also are pending for a 45-unit condo project in the area of 45th Street and 32nd Avenue South; the 88-unit Dakota Creek Lofts project at 1820 Dakota Drive; and additional apartments on the North Dakota State University campus.

The city issued 22 twinhome permits, 10 more than in April 2008.

Driving the multifamily construction spurt is NDSU enrollment growth, a need for more senior housing and lower vacancy rates, Gilmour said. People also may be finding it harder to obtain loans and afford a house in the current economic climate, he said.

"Tighter credit standards would certainly keep more people in apartments," he said.

Confidence is higher among homebuilders than it was earlier this year, and buyers seem more willing to look, Eid said, noting the "fantastic" traffic during the association's recent Parade of Homes.

Low interest rates and an $8,000 tax credit for first-time homebuyers also are spurring interest, he said.

Regardless of whether new single-family homes or apartments are being built, the construction is good for the metro area, Eid said.

"It's still another space for a household, for a family, to call home in Fargo-Moorhead," he said.