Building patience: Buying a new home was already getting harder in Spokane County. Then the fires happened.

A homebuilding crunch that has persisted for years promises to frustrate first-time homebuyers in Spokane and stymie efforts to quickly rebuild homes in fire-ravaged Medical Lake and northern Spokane County.

“It’s absolute chaos,” said Corey Condron, a local homebuilder.

The housing construction industry, he said, is riddled with disruptions.

A review of Spokane building permits shows contractors are focusing on more multifamily homes than before. If the city of Spokane stopped issuing residential multifamily construction permits today, this year would still rank as the busiest year in local history for builders.

The homebuilders’ challenges are contributing to the shortage of homes and gives little hope of a quick rebuild for those whose homes were destroyed in the Gray and Oregon Road fires.

The fires burned 366 houses, including that of Rex and Pat Menke.

“Builders are already so busy, and now there are hundreds of other homes to rebuild,” Rex Menke said. “I have no idea how long it would take to have a home again.”

The couple loved their location on the shoreline of Granite Lake because it had limited access to boats, so the pace was slow and the water was calm – much like their lives.

“That was our home; it had everything going for it. It was so special to us,” Rex Menke said.

But fire victims like the Menkes are entering into the homebuying process at an already trying time.

Slow permitting processes, government regulations and supply chain disruptions have raised costs and add to work time, contractors said.

But the biggest reason it has never taken so long or been so expensive to build homes in Washington is labor.

Condron has been in the homebuilding industry for 35 years. He is the CEO and owner of Condron Homes, a company that has been in his family for three generations.

Taking over just before the financial crisis of 2008, Condron has navigated some of the toughest conditions the industry has seen. But nothing compares to now.

“Everything is chaos,” he said. “When I used to come to a job site, we used to build. Now all I feel like I’m doing is putting out fires.”

As Condron spoke, he stood in the entryway of a $900,000 homebuilding project. Five years ago, it would have been $550,000.

Next month, Condron expects another jump in housing price.

On Oct. 29, new building codes will be implemented that will promote a shift from natural gas heating to electric. Put forth by the State Building Code Council, the new codes will force homes to use electric heat pumps to warm air and water.

Condron said consumers will feel an immediate impact.

“My buyers are going to see a $16,000 increase in the price of their house,” he said, adding this flat rate increase will be applied to every house the company builds. “We can adjust prices in the future, but until we can get some historical data, that’s how much the new code will cost.”

Though the company has shrunk since its peak decades ago, he has a full staff. But the shortage of skilled plumbers, electricians and HVAC workers continues to hurt his business.

During a typical build process, Condron would precisely schedule subcontractors to minimize down time.

“The length of time to build has almost doubled compared to five years ago,” he said “We used to build without any breaks. Now, sometimes, a job will sit without activity on it for weeks at a time.”

Though these “dead zones” can be created by supply chain problems, labor shortages are the main issue.

“We can’t get a rhythm going; we take one step forward, run into a wall, step forward, then run into another wall,” he said. “There’s just no way to get a rhythm.”

The unfinished house is part of Wandermere Heights, a 185-home gated community that was started in 2003. A family legacy, the project is only a few homes away from completion.

After that, Condron will primarily focus on the unincorporated areas of Spokane County.

“Spokane County has always been the easiest, most accommodating of all the jurisdictions,” he said, kicking a loose screw out from under his foot. “I don’t build in Airway Heights, Medical Lake, Liberty Lake, City of Spokane or Spokane Valley. I mean, they all have their own building departments and permitting processes, but they make it even more difficult than it needs be.”

It seems Condron is not the only one with the idea.

Building boom or bust?

Fewer homes are being built in Spokane every year.

According to data obtained from the Spokane Home Builders Association, 2023 is shaping up for a poor showing.

At this point in 2020, there were 220 single-family residential construction permits issued. After a dismal year in 2020 during the pandemic, the market shot up to 271 permits in 2021, according to a report from Steve MacDonald, director of community and economic development for the City of Spokane.

Since then, the market has continued to fall.

At this point in 2020, 175 single-family homes were permitted for construction. This year, only 135.

But those falling numbers for single-family home permits reflect another trend – a construction boom of multifamily housing in Spokane.

“If we were to stop issuing multifamily residential permits for the rest of the year, it would still be our highest number of permits ever issued in one year,” said Spencer Gardner, director of planning services for the city.

Gardner attributes the spike in permits to efforts from Building Opportunity and Choices for All, a city program aimed to encourage multifamily housing.

The July 2022 initiative uses an interim zoning ordinance to remove some development regulations.

It reduced lot width requirements and removed unit caps for residential projects.

It has resulted in an explosion of construction projects.

Before the program, Spokane would issue just over 500 multifamily residential permits each year.

During the program’s first year, multifamily housing permits increased by more than 300.

Projects are still taking longer than what is typical because of the shortage of trade workers, but the increase of affordable units will help more people find a place to live.

Though the development is good news for low-earning renters, first -time homebuyers could be squeezed out of the market.

As available single-family homes grow more scarce in city limits, they are expected to increase in price.

But the city is attempting to remedy this issue buy growing its inventory of middle housing – smaller, less expensive properties like townhomes or duplexes that can be owned instead of rented, according to Gardner.

“That’s exactly the strategy,” Gardner said. “People can get in on the lowest rungs of the housing market and start to build equity.”

The most duplexes built in Spokane at this point in the year was in 2019, when 22 were built, according to MacDonald’s report.

At this time in 2020, four duplexes were built, 12 were built in 2021 and only two were built in 2022.

So far in 2023, 42 duplexes have been built.

City efforts aim to turn renters into owners – and it’s succeeding.

But in nearby Medical Lake, it has gone the other way.

‘I’m unsettled’

Though Spokane is catering to first-time homebuyers, Gray fire victims who want to rebuild are faced with a tough decision.

The Menkes had been living in their Medical Lake home for more than 13 years before it was consumed by the fire.

The property was 2 acres of serene country. Wooded, secluded and quiet, it was perfect, the Menkes said.

“We had no immediate neighbors, so it was just us out there,” Rex Menke said. “We can’t imagine living anywhere else.”

The Menkes are renting the basement of a friend’s home on Spokane’s South Hill as they consider their options.

They are undecided on whether to rebuild on their dream property or start fresh elsewhere.

“It’s just about the most difficult choice we’ve had to make,” Rex Menke said. “Everything is burned down and ugly there now … but we have such a favorable mortgage rate.”

The Menkes’ dream home was insured, and they received the maximum amount that was possible under their plan. Still, they are unsure if they want to rebuild. Or can.

Rex Menke, aware of how busy homebuilders are, said the most pressing factor in their decision is time.

“I’m 75 years old. I don’t want to spend the next few years sitting among a bunch of burnt trees waiting for a house,” Menke said.

The uncertainty of their future weighs on him every day.

“Even when you know them, you just feel like a burden to who you’re staying with,” he said as he and Pat settle into their temporary living arrangement.

“No matter what, I just can’t shake it: I’m unsettled.”