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Mon June 3, 2013
New Home Construction Continues to Lag in RI
Rhode Island’s unemployment rate is edging downward but one sector of the economy remains in trouble. New home construction has fallen off a cliff since the recession began and, there’s no sign of improvement on the horizon.
At the Rhode Island Builders Association they like to say it hasn’t been a recession but a depression. Housing permits have fallen from 2500 in 2000 to fewer than 700 last year. Builders Association president John Marcantonio said land costs, land use regulations and a hostile loan environment have made it just about impossible to make money on homes priced in the 300-thousand dollar range. As a result:
"The only thing that’s being built is your high end luxury market and your lower-end subsidized market. Everything else in between – what we would call your middle class market rate housing – has been non-existent."
According to the state Department of Labor and Training, the construction sector has lost eight thousand jobs – or 35 percent – since 2006. Marcantonio said builders have moved out of state, turned to remodeling, or are trying to find new careers.
Rhode Island Economy