PETERSBURG, AK <p>Petersburg Community Development Director Leo Luczak says so far this year seventy-six building permits have been issued. That number includes electrical and plumbing permits as well as new construction and renovation. </p>
<p> “At this pace, it’s going to be a record year, I think.” </p>
<p>Luczak says the City has issued eleven new home construction permits this year. </p>
<p> “For 2001 there were a total of 18 new building units. So that would be the big year. Other than that, our biggest year was 9 dwelling units and our lowest was last year with three.” </p>
<p>Luczak says he suspects a variety of factors are driving the construction push. </p>
<p> “Been low building the last couple of years, so the demand was up. And I guess I’d attribute it to high fish prices and low interest rates.” </p>
<p>In addition to the new homes, seventeen permits have been issued this year for renovations and additions. </p>
<p>Petersburg residents Don and Karen Cornelius are finishing a 700 square foot addition to their house. They decided to use an inheritance to cover the cost of construction. </p>
<p> “Well, our money hasn’t been growing too much in interest lately. And we did have a little nest egg, so why not use it now. And have some fun with it. Instead of just letting it dwindle. Every time we get an envelope from the post office, you just say “ooh” because your money has dropped. Again. And so this, to me, seemed like a good idea, to sink it into something that all of us could make use of and get a lot of enjoyment out of.” </p>
<p>Wells Fargo Business Banking Manager Steve Boehlert says many people appear to be following that logic. </p>
<p> “Certainly if you look at savings account rates, they are very low, almost non-existent. The stock market seems to be fairly volatile, so maybe people are not wanting to take any risk out in the market. So maybe they see the real estate market as a fairly stable place to put some money. Potentially they are either buying even bigger houses or building houses to keep their cash.” </p>
<p>Boehlert says people aren’t borrowing money, however. Despite increased construction activity, demand for construction loans is dead. </p>
“I don’t know if people are using other financial institutions or if they are using their own funds to build them, but the construction financing in southern Southeast is pretty slow for Wells Fargo.” </p>
<p>Contractor Donald Sperl has noticed a similar trend. He says more people are paying for construction out of pocket. </p>
<p> “I don’t know if it’s directly related to the fish, but with the good forecast this year, typically we will see next year a few more projects going on. Might be people stepping out and building a whole house, might be just an addition, remodel, whatever, but most of that money stays here in Petersburg, so that’s nice.” </p>
<p>Sperl is beginning construction on a new house in a few weeks, outside of city limits. </p>
<p> “It seems like there is a little more construction, at least on the larger projects, going on out the road a little further. There are still properties selling pretty reasonable. So not everything you see in town is a representation of the building industry or how good people are doing or how many houses are being built.” </p>
<p>The house Sperl is constructing did receive a building permit from the city, but most projects outside city limits do not. That means there may be additional projects not included in the city’s tally. </p>
<p>But Sperl cautions against reading too much into the current upswing. </p>
<p> “You know if you look around compared to 10 years ago, I think there’s less going on, but not in a negative sense, it kind of goes in cycles, like everything.” </p>
<p>Nationally, new home construction remains at historic lows, although the number of housing starts was up in June. </p>