One of the untold “good news stories” in the sad saga of the housing market droop can be seen in St. Paul, Minneapolis and other cities with older houses: People are remodeling and putting major additions on their existing houses at a strong pace.
In St. Paul so far this year, there have been 6,119 permits issued for major home additions. Last year, there were 6,244; in 2005 — 6,348, and in 2004 — 6,879.
These additions range in cost from under $10,000 to way more than $100,000. In December, 2005, eight housing additions were reported, with an average cost of nearly $86,000.
Because St. Paul doesn’t have much vacant land for new construction, new housing permits are far, far lower. So far this year, there have been only 70; (That compares with 139 in 2006, 143 in 2005 and 233 in 2004.) In those earlier years, several major housing developments, including the Upper Landing development and those along West Seventh Street, were in play.
“When the housing market slows down, people tend to stay where they are, but they often start to reinvest in their existing homes,” said Bob Kessler, St. Paul’s director of the Department of Safety and Inspections.
Residential Construction: Comparing New Construction and Additions
“We’re seeing all kinds of new bathrooms, kitchens being enlarged, and new or larger garages,” Kessler said. “This is a significant reinvestment in our housing stock. It’s been very constant, as our housing stock rejuvenates itself. And it’s keeping our building inspectors so busy, they can’t keep up with the work load.”
In fast-growing suburbs, where new construction is the norm, the permit pace ebbs and flows, depending on the market cycle. And it’s currently low. A recent report in the Star Tribune showed that cities like Shakopee are suffering from the new housing turndown in many ways, including the loss of permit fees for new houses, which they’d come to rely upon for the city budget.
“We hear so much about the housing problems, but the stories paint the whole housing story in terms of the new construction in the suburbs,” Kessler said.
“But especially in St. Paul, Minneapolis and some of the inner-ring suburbs, you can’t focus solely on new construction and housing starts as a way to measure the relative health of our housing stock,” he said.