By Cheryl Jahn

Building permits dip

Jun 20, 2023 | 4:01 PM

PRINCE GEORGE – It has been a good news story for years. The number of building permits and their value have been at record highs. In 2020, 532 permits were issued at a value of $221 million, the following year, 460 permits were issued, valued at $237 million, and last year, 476 permits were issued, worth $252 million.

But the latest development permit layout shows a different picture. Whereas the 194 permits valued at 116 million dollars have dropped to 125 permits worth 36 million dollars. A sign of the times, with interest rates and inflation through the roof.

“And so when you’re looking at commercial development, that requires a lot of borrowing power,” says Councillor Cori Ramsay. “When rates are this high, it’s just not economically feasible to do. You know, a lot of these huge projects.”

Councillor Garth Frizzell is typically the first to call up the permit numbers during Council and even he agrees, the latest numbers are something of an anomaly.

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“Interest rates go high or people start slowing down with their purchases or the inflation rate goes back down from its really big highs down to a reasonable rate like we always should be targeting around two percent for our inflation,” says Councillor Garth Frizzell. “But when we talk to development services, they say, you know, there’s there’s still more to come.”

He says a recent meeting with a lead economist had some good news moving forward as far as this community is concerned.

“Three or four months ago, it was a major financial institution, had their economist visiting Prince George and he said this is one community that will weather the recession effectively. And to date, we’ve seen indications we won’t. But the community is still chugging along really well.” And Councillor Cori Ramsay is of the mind that this trend is not going away anytime soon, with the Bank of Canada hiking rates last month and predicting to do it again this month. So were 2020, 2021 and 2020 the glory years?

“I think it was, you know, a period where we had all of the right factors in place for strong development,” says Ramsay.

“But we’re already seeing an $80 million reduction in building permits in just Q1 alone. This trend is going to continue. We have a labor shortage. We have access to materials and resources is really challenging right now. It’s a perfect storm.”

One of the three greatest declines in permits and the value of those permits from January to May between 2021 and present day is in the construction of multi-family dwellings.