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.