Total value of building permits climbed last year beyond $1.15B
By CINDY GONZALEZ
Nebraska Examiner
OMAHA — The signs are plentiful: newly framed houses around town, freshly bulldozed land, tower cranes dotting the skyline.
Now a recently released report reinforces that construction activity in Nebraska’s largest city has reached new heights in several ways.
According to the City of Omaha’s latest annual “Building and Development Summary,” the total estimated value of building permits issued by the Planning Department last year climbed to roughly $1.15 billion — the highest yearly tally on record for the city and second highest when accounting for inflation.
2022 could finish even stronger
That price tag reflects construction ranging from houses and apartments to converted structures to new, altered or expanded properties containing office, retail, educational and other operations.
In all of last year, about 1,349 acres of land got the official green light for final platting, which meant the area was to be divided, parceled or otherwise prepared for new development. Not since 2005 had Omaha city leaders okayed that much ground to be platted, the report noted.
“Obviously people are investing in the community,” said City Planning Director Dave Fanslau. “It was a busy year, a historic year, just a lot of activity for the development and construction industries.”
City officials expect 2022 to finish with as much or more permit activity, especially if the skyline-changing $600 million Mutual of Omaha downtown office tower gets out of the ground yet this year.
Because building permits and plat approvals are granted in early stages of a project, they’re good indicators of investment and economic growth to come. Many of the projects that got the go-ahead last year are now noticeable and changing the landscape of today.
Indeed, 2021 ushered in a burst of building that included downtown student dorm rooms, a riverfront science museum, senior apartments, hotels, schools, banks and an Amazon warehouse.
Development, by the numbers
Consider other highlights of the report:
- The number of permits issued last year to build 3,170 residential dwellings (that’s houses and apartments combined) was slightly less than the previous year but above the annual average of about 2,800 during the previous 10 years. The 2021 residential permit count is the third highest since 2005.
- Of the 3,170 homes, about half were single-family houses and duplexes and the other half were apartments and townhomes. That essentially even split reflected the same basic pattern over the past decade.
- Platting activity for nonresidential-type construction projects — that would include commercial, office, industrial and mixed-use ventures — hit a 13-year high, with 476 acres receiving final plat approval last year. For perspective, Omaha’s annual average during the previous decade was 159 acres.
- The total valuation of that nonresidential development, according to permits, rose to $721 million last year, the highest on record for the city.
The 60-page report, packed with data and punctuated with graphics and charts, was posted on the city’s website without any fanfare. It covers building activity within the city limits and three miles beyond.
City planners noted in their analysis that Omaha’s housing market was strong, even though the total estimated value of residences issued building permits in 2021 dipped compared to the year before (from $461 million to nearly $431 million).
Dense is good, say urban planners
The permit activity showed that housing projects launched last year were more heavily concentrated in suburban Omaha: Twice as many residential permits were issued west and outside of the Interstate 680 loop than inside of it. That stands in contrast with the unprecedented year of 2017, when for the first time in modern history, more building permits were issued in urban areas closer to the core of the city than its outskirts.
Remarkable, however, is the data showing that new housing campuses overall are getting more dense, even in suburban Omaha. Over the past five years, the average number of dwellings per acre of final platted residential development was about three. That has doubled to about six.
City planners attributed much of the shift to projects such as Heartwood Preserve, the mixed-use redevelopment that offers a variety of housing and a good concentration of apartments in a campus setting near 144th Street and West Dodge Road.
‘Bullish’ on apartments
It’s a movement policymakers like to see, as developable land in Omaha is growing more scarce. Fanslau said building up instead of out — fitting more housing and population on less ground — helps build the city’s property tax base and generally saves on the cost of public services.
“We hope that trend continues, no doubt,” he said. “We don’t promote density just for density’s sake. It has to be designed appropriately. But it’s very important and takes advantage of existing infrastructure, sewers, water and roads.”
With its 237-unit rental housing project rising near the relatively new Flanagan Lake, Woodsonia Real Estate launched the city’s largest apartment project of last year, according to permit records.
Woodsonia’s Carson Stratman said he and his team actually started planning for Westline at Flanagan Lake before the pandemic struck and prompted them to pause. The group didn’t foresee a “housing boom” to follow so soon, he said. Now, in addition to moving forward with the first 237-unit phase, Woodsonia envisions upping the count in that northwest Omaha pocket eventually to about 500 apartments, he said.
“We’re bullish on the multifamily market right now,” Stratman said. He believes demand will continue for rentals, largely because he said the cost of single-family homes has “skyrocketed.”
In both the Omaha and Lincoln areas, the median price of a house, counting both new and existing home sales, went up about 13% in just a year’s time. The jump from about $236,000 to $268,000 compares sales so far this year with the same time frame last year.
Population density only slowly rising
City planners said in the report that activity related to the non-residential side of building permits — which would be commercial, office industrial and mixed-use — moved at a strong pace.
Ranking among the most giant of those projects, in terms of square footage, were the Douglas County justice center office tower and youth center, a few schools and the Amazon warehouse.
The estimated $721 million total value of nonresidential development permits represented a banner year. In contrast, as measured by physical building space, 2021’s 1.73 million square feet of total construction and renovation work fell about 13% short of the previous 10-year average.
Meanwhile, the city’s population density has been slowly rising from a low of 4.8 people per acre in 2008 to today’s 5.2. The report shows that since 1960, Omaha’s land area has more than doubled, growing 175% while city population has grown by only about 59%. That resulted in a long-term decline of population density — from about 8.9 people per acre in 1960 to today’s 5.2.
Fanslau reiterated the city’s call for greater density and infill development efforts to beef up the people count and to help offset fiscal implications.
“It’s very important,” he said. “We like density.”