5-year Scottsdale building permit snapshot highlights steady real estate trends

Scottsdale Fashion Square is one example of a local area going through redevelopment currently. (Independent Newsmedia/Arianna Grainey)

Since 2014, the total amount of building permits issued in Scottsdale has remained mostly steady — floating above 2,500 from year to year — although the type of permit fluctuates.

The city of Scottsdale covers 184.5 square miles, and stretches 31 miles from north to south. Within that area is a tight-knit community of single-family homes, multifamily housing and commercial buildings.

The Old Town Scottsdale area is comprised of 90 restaurants, 320 retail shops and more than 80 art galleries — in addition to housing units.

Since 2014, the stream of building permits being issued at City Hall has remained fairly steady:

  • 2014: 2,785
  • 2015: 2,687
  • 2016: 2,668
  • 2017: 2,689
  • 2018: 2,721

When looking closer, both commercial and multifamily housing permits take a dip in 2016, while single-family residential saw its highest amount of permits in the same year topping 500. Scottsdale’s Director of Development Services, Michael Clack, says the ebb and flow of building permits from year to year depends on what’s in demand.

“In my experience, I think it’s just based on what the demand is for,” Mr. Clack said. “Some years it may be speculative office space that might be in demand. Fairly recently it’s been apartment complexes. Sometimes you’ll find there’s commercial buildings that follow suit in close-proximity.”

Mr. Clack explained in the development industry, areas that see residential growth are often followed by businesses that offer that neighborhood support: Grocery stores, coffee shops and perhaps restaurants.

Commercial building permits for the past five years have been:

  • 2014: 189
  • 2015: 131
  • 2016: 70
  • 2017: 88
  • 2018: 102

While multifamily residential permits were:

  • 2014: 142
  • 2015: 114
  • 2016: 80
  • 2017: 131
  • 2018: 214

The amount of multifamily residential permits doesn’t necessarily indicate one permit per condo unit, Mr. Clack clarified, stating a permit is issued per building. Many apartment and condo buildings are multi-floor, he noted.

Single family residential permits account for the most permits year to year:

  • 2014: 440
  • 2015: 427
  • 2016: 502
  • 2017: 453
  • 2018: 387

The permits issued in Scottsdale represent a small upward curve, Mr. Clack says.

“Right now it’s at a slow curve upward — very shallow — almost to where we’re maintaining to past several years the number of permits that we’re issuing,” he said. “I know a lot of plans that come in we’re getting tenant improvement plans, which are in existing buildings, it’s not a new building.”

Mr. Clack points to the Scottsdale Fashion Square as an example property that’s rebuilding within its established footprint.

“They’ve been doing a lot of rebuilding, particularly on the inside, doing a lot of remodeling, interior floor plan and have different stores moving in and out. Those generate plan reviews and permits within the mall,” he said.

Overall, Mr. Clack believes — while pointing out that he’s not an economist — the number of building permits Scottsdale experiences is healthy for The West’s Most Western Town.

“If you have a vacant piece of land, that represents a certain piece of value as far as property tax, when you begin to improve on land, you’ve increased its value, which increases its property tax,” he explained. “The city is getting a long-term benefit just with improvements on that land.”

The development services director says on the commercial side of the coin, the city sees benefits from employees of companies going out to lunch, stopping for gas on their way to work or grabbing groceries on their way home.

“Some may wind up spending money in Scottsdale, and we benefit from the sales tax there. They may eat lunch in Scottsdale, may fill up their car up with gas in Scottsdale, buy groceries on their way home — that sales tax is being generated,” he said.

“There is a very positive economic balance or growth associated with building permits, it just depends on what’s being built.”

Northeast Valley News Editor Melissa Rosequist can be e-mailed at mrosequist@newszap.com or can be followed on Twitter at twitter.com/mrosequist_.

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