New development taking a hit in Cary
Posted October 16, 2008
Cary, N.C. — New development in Cary – where the number of new homes soared from 2005 to 2007 – is taking a direct hit from the economic decline.
Last year, plans for more than 4,000 residential units were submitted. This year's monthly average of 131 home permits is much lower than the last two years. In 2007, the town issued 193 and in 2006, 164.
"Right now, we're seeing a slowdown," Cary Mayor Harold Weinbrecht said. "That's OK. It allows us to do a lot of things, including catching up on our infrastructure."
But some developers say all the blame shouldn't be put on the economy.
"Certainly, the economy isn't helping anything, but what I consider to be exorbitant fees are just killing a lot of small builders and big builders," said Michael Dean Chadwick, who's been developing homes in Cary and the Triangle for the past 13 years.
In July, the Town Council raised impact fees – what developers pay to help cover growth costs – by 75 percent.
Compared with other areas in the Triangle, Chadwick says it is up to four times as much in Cary.
"(Cary's fees) can be $15,000 to $20,000 in the building permit process before you ever stick a shovel in the ground," he said. "And that's a tremendous burden on a lot of builders, right now."
Weinbrecht, however, said impact fees are playing a small part in the slowdown of development.
"In the whole scheme of things, it's just a small percentage of the cost of development," Weinbrecht said. "I think the biggest indicators are the economy and the ability to borrow money."
Fewer new homes would eventually reduce tax base revenues, but budget officials say it might not be felt until the next fiscal year.
Commercial development is also slowing in Cary. Plans were submitted for 3.1 million square feet of non-residential space last year. This year, fewer than 1 million square feet were proposed.
Weinbrecht says he does not expect the economic viability to negatively affect the town's operational budget.
"I don't think we'll have to make major adjustments," he said. "The only adjustments would come if the economy remains unstable through January or February."
Cary plans to sell approximately $35 million worth of bonds in Spring 2009 for its capital projects, such as a planned downtown street scape. Town officials say they don't anticipate problems selling them.