Construction industry may build momentum

June 29, 2012 by  

A move by St. Cloud City Council could help the home building sector get out of the basement.

Fees charged for construction of new houses will be reduced by $1,500, a motion put forward by councilor George Hontos and approved by city council.

In discussing the proposal in council chambers, Hontos said he felt that reducing new home construction fees would be an incentive to contractors and home-builders, which could trickle down to the buyer. Any stimulus in construction, real estate, and legal fees is a bonus to print companies, serving clients with everything from blueprint reproduction to listing sheets.

The mayor of St. Cloud, Dave Kleis, said he was not convinced that a $1,500 fee reduction would be enough to stimulate new home starts, particularly since there are many homes sitting empty in the city. It was noted that only seven new home permits were granted in St. Cloud in the first six months of 2012, significantly lower than in years past. If the fee reduction had been implemented in St. Cloud last year, a year with 26 new home permits, the city would have lost $39,000 in anticipated revenue.

Kleis stated that the fee structure for new home construction and utility installation and hookup are already competitive. Despite his point, however, council voted in favor of the measure almost unanimously with only one objection. Hontos argued that by stimulating new home starts, the city would recoup costs in tax revenue that they would not have received with lots sitting vacant. In response to the Mayor’s initial objection, Hontos argued:

“What is wrong with just trying something? We don’t have a great downside here.”

The fee reduction will only be in effect for the remainder of 2012.