2021 sees building permits, tax revenues soar

||| BY MATTHEW GILBERT, theORCASONIAN OPD-ED REPORTER |||

Summer has not officially arrived, but you would never know it from the hum of activity blanketing the islands. Some of this has been expected as visitors, residents, and new arrivals start spreading their post-pandemic wings and delayed construction projects ramp back up (with the exception of Prune Alley) despite escalating material and labor costs. Is this a temporary spasm or the beginning of a longer-term trend?

At the May 4 County Council meeting, Erika Shook of the Department of Community Development (DCD) gave council members a report on first quarter building permits for 2021.

As outlined in her April 30 memo:

• Number of permits under review (in “the Queue”): 273
• Number of permits reviewed and awaiting additional submittals: 199
• Number awaiting first review: 74
• Permit review turnaround time: approximately 13-weeks.

Additionally,

• Overall submittals are up 50% from 2020 and 20% from 2019 over the same time period.
• Building permit approvals in 2021 were higher than at the same time in 2019 or 2020.
• In January, we received nearly 100 permits, twice the average for the month due to new building codes that went into effect February. Permit submittals in February were normal, but March and April are exceeding averages.
• As of April, we’ve received permits for 79 new dwellings, more than 70% of the total that we typically receive in a year (100 +/-).
• First quarter revenues exceeded 2020 first quarter revenues by $102,295, an approximately 50% increase.

According to the memo, “The number of submittals per month is far exceeding our review capacity, so additional overtime and temporary help has been implemented to improve review times. If this trend continues, we will need to consider other options in order to bring review times down.” In the meeting, Shook said she expects these numbers to remain high through the summer, and that the DCD would propose a budget amendment of $25,000 for additional staffing. “Permit revenue is also going up to compensate,” she added.

County Treasurer Rhonda Pederson generously provided the latest figures on sales and lodging taxes, and the numbers tell a similar story:

• Lodging tax revenue (approx. $301K) is up 53% compared to the same period in 2020 and 45% over 2019 figures.
• Sales tax revenue (approx. $1.93M) is up 30% compared to the same period in 2020 and 26% over 2019 figures.

[Note: These Quarter 1 revenue numbers reflect activity from November through January; there’s a two-month lag in data, which means Quarter 2 (Feb. – April) figures will be released in July.]

This is obviously good news for the local economy, but the outsized bump in both visitors and residents raises the ante on questions of impact: long-term rentals have dried up, local business staffing remains a challenge, and the pressure on infrastructure and natural resources continues. Summer/Fall numbers may provide an important barometer for what to expect going forward.

Time for a Tourism Master Plan?
Orcas Island is on the cover of the latest issue of Journey, the regional magazine of AAA, and talk of a tourism master plan (TMP) has resurfaced – though it’s far from clear what that would accomplish. Council member Jamie Stephens is currently working with Lodging Tax Advisory Committee (LTAC) member Faith Van De Putte on scoping a consulting RFP, which will then go back to LTAC for approval. “Depending on your point of view,” he says, “there is a wide variety of what people want out of the plan.”

Cindy Wolf notes that, “Any process to review current tourist policies and impacts should be inclusive of the many voices heard through the surveys recently completed by Confluence Research and Consulting. The conversation has not yet come before Council, so I don’t have a feel yet for how we would want to approach formulating a plan.”

“I believe that the creation of a TMP is appropriate in many ways,” adds Christine Minney. “Designing a framework that addresses concerns such as visitor education, insufficient infrastructure, environmental stewardship, and a sustainability benefitting residents,
businesses, wildlife, and visitors alike is important to our community. I see the TMP as an opportunity to shift the skepticism of marketing to that of hopeful management, which may be a path to acceptance that tourism itself is going to remain a part of our lives here in the San Juan Islands.”

On the matter of the selective vacation rental moratorium – two months out from its July 13 deadline – council members are still waiting for DCD staff to report back with options for setting caps on permits. That report is expected in the next couple of weeks.