By Isaac Bonnell

Lance Clark certainly has his work cut out for him.

As the new executive director of the Building Industry Association of Whatcom County (BIAWC), he is pushing forward in an industry that is experiencing perhaps the worst slump in decades. New residential construction has all but disappeared leaving builders scrambling to find new work and wondering when the economy will turn around.

The industry is also seeing an increase in the cost of doing business. The Department of Labor and Industries (L&I) this year raised insurance premiums an average of 7.6 percent.

Despite the hardship, Clark sees this as a time to strengthen resolve among the 600 BIAWC members. The BBJ recently sat down with Clark to discuss the state of the home building industry and the issues affecting builders.

The Bellingham Business Journal: How is the homebuilding industry doing right now?

Lance Clark: It’s a little slow but we’re seeing signs of light at the end of the tunnel. There’s a slow uptick. We’re still seeing some permits being taken out.

In the last 50 years, housing has led the economy out of recessions — and we will do that again.

As I mentioned, we’re on a slow uptick, but it really is about consumer confidence and consumers and builders getting lending. As much as there’s talk about stimulus money coming out of Washington, D.C., bank lending locally is still tight. As credit is made available from the Fed, it needs to be available at the local level so consumers can use it.

BBJ: What are the main concerns you’re hearing from builders?

LC: Our members are cautiously optimistic. They’re working hard to keep their businesses intact and their construction crews busy.

Our members are always concerned about the cost of building permits. In some regions of the country, local governments are reducing or delaying impact fees. Instead of charging immediately when you take out the permit, they delay it until the point of occupancy because that’s when the builder and developer actually start to make money on that costly investment.

They’re also concerned about the Washington Department of Labor and Industries with this year’s sizable premium increases that we’re paying at a time when we need relief. It’s excessive and a little competition and privatization is not a bad thing to be considered. In some states, there’s privatization and self-insured plans, and there’s even legislation at the state level to address that. So stay tuned.

BBJ: How does the business environment here compare to other places where you’ve worked?

LC: Certainly the environmental community in the Pacific Northwest is probably the strongest in the country. I think the difference that the public isn’t always aware of is as much as it is important to protect our environment, there are balances in the basic human needs to have shelter, to have jobs and support a family. So you can live in an ideal utopian bubble, but people still have to bring home the bread.

BBJ: In the realm of government affairs, what issues do you plan to tackle this year?

LC: Over the past couple of years, we’ve been active in the Countywide Housing Affordability Task force (CHAT). We’re optimistic that some of the recommendations will actually be taken to heart and implemented and that it will not become shelf art.

It’s highly likely that the City Council will again visit the issue of inclusionary zoning. One way or another, local government will attempt to impose this tax on future new homebuyers and ultimately we know that further study needs to occur to understand the impact.

So the real question to be asked is are we going to subsidize housing at the expense of serving another? Perhaps one of the CHAT recommendations that needs to be implemented is considering a housing levy. If voters deem it important to subsidize, then it should be something broad-based that society supports, not something that just one builder or homeowner supports.

BBJ: What needs to happen in order for the building industry to turn around?

LC: Five things. First of all is consumer confidence. There needs to be positive public sentiment; consumers beginning to be comfortable in spending and circulating money in the local economy.

Number two: bank lending. As our elected officials out of D.C. say that the dollars are available, it needs to be seen that it’s available locally because it isn’t right now. That is both for consumer lending as well as builder lending.

Number three: Affordable housing solutions that are meaningful, in which government doesn’t just jack up fees that add on to the cost of housing. It needs to be supported by broad-based taxation so that all of society bares the tax burden, not just single industries.

Number four: the movement of existing housing inventory. This will open up the opportunity for new construction to occur.

Last but not least is a vibrant job economy. As I mentioned earlier, housing will lead this economy out of the recession, just like it has before.