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MISSING THE BOOM
BUILDING INDUSTRY IN ERIE COUNTY STILL IN DOLDRUMS

The economic good times just keep on rolling.

Rolling right past Buffalo, that is.

While the national economy continues to surge ahead -- with housing construction at an 11-year high -- Erie County's building industry remains in the doldrums.

In 1998, total construction -- residential and commercial combined -- dropped from the previous year, municipal building records show.

And that's even with the housing industry perking up a bit in 1998 -- keeping in mind, of course, that 1997 was a fairly lifeless year for home construction in Erie County.

"I definitely had a good year (in 1998)," said Richard Bergman, president of Heartland Homes. "But it was good from the perspective of what's going on in Buffalo."

Across the nation, low interest rates helped propel housing production to its highest point since 1987, according to the National Home Builders Association.

Here at home, there was no comparison.

"(Nationally) 1998 was one of the best years in recent history, but Western New York didn't really see that," said Joseph W. McIvor Jr., executive vice president of the Niagara Frontier Home Builders Association.

"We've missed the boom that has moved the national economy," McIvor said.

The overall story was pretty much the same from one town to the next in Erie County, whether it was the older, built-up suburbs or the newer boom communities of recent years.

In Amherst. Cheektowaga. Tonawanda. Hamburg. Lancaster. Orchard Park. Overall construction was down.

Bucking the trend was West Seneca, which has started to catch developers' eyes with a new industrial park on Union Road. It posted a 70 percent increase in total construction.

The big surprise of the 1998 season was Buffalo, which saw more new one- and two-family homes than any of its suburbs.

Still, Buffalo, like much of the rest of Erie County, experienced a drop in commercial development, which generally contributed to the dip in total construction.

And while 1997 was considered pretty good when it came to commercial development in Erie County, the 1998 commercial figures are generally lower than the 1996 ones also.

"I think the Western New York market is a slow, steady market. There is nothing spectacular about it," said Carl J. Montante, president of Uniland Development Co., one of the major commercial developers in the area.

As for residential construction, it was up slightly from the 1997 housing slump. Even though the area's population remained stagnant, an estimated 1,000 to 1,200 new single-family homes were built in Erie County in 1998. Those numbers are less than half of what they used to be just before the decade began.

In fact, 1998 was the second year in a row that once-booming Lancaster saw a drop in the number of new single-family homes.

"There are a lot of houses already on the market," said Robert L. Laney, Lancaster's chief building inspector.

And Amherst -- once the area's development king, with as many as 575 new homes built in 1988 -- saw just 114 homes built in 1998. That's an improvement, considering just 82 homes were built in Amherst in 1997.

In Orchard Park, housing construction remained stable.

That was also the case in Clarence, which built 198 homes, or 10 more than it did the year before.

Buffalo, however, topped all its suburbs in 1998 with 232 new single- and two-family homes -- twice as many new homes than were built in the city in 1997.

It's part of the city's plans to demolish dilapidated homes and rebuild, said Deputy Housing Commissioner David E. Pawlik. All the efforts of planning, working with developers and finding money started to bear fruit last year, he said.

More new housing is ahead, said Mayor Masiello.

"We have to have quality housing to have quality neighborhoods," Masiello said.

Despite the 1998 housing picture's improvement over 1997, what's troubling to many in the housing industry is that Erie County has missed out while the rest of the nation reaps the benefits of a historic economic boom.

"There's no question that, for the past three years, Buffalo has been below the national trend," said Elliot Lasky, president of Forbes Homes. "If you look at the overall countywide statistics, we don't really have growth. So when you don't have growth, it's kind of hard to show strong new construction."

And that stagnant population is tied to the lack of new jobs in the area, which is tied to the area's high taxes, said Marrano/Marc Equity President Patrick Marrano.

All three dictate the number of homes being built, said Marrano, whose analysts estimate 1,200 new housing starts in Erie County during 1998.

"That's an anemic number for the size of Erie County," Marrano said. "In our good times, we were doing double, triple that."

The new housing being built here is partly for corporate transients but largely for the existing population that can afford to upgrade, builders said. Or it's for senior citizens who want to scale down. In addition, market-rate and senior-citizen apartments popped up across Erie County last year, particularly in Amherst and Hamburg, records show.

"There's not a boom here. Certainly we have a long way to go," Marrano said. "Hopefully we've hit the bottom and we're turning it in the right direction."

There is, however, some optimism about the year ahead.

As far as commercial construction, that tends to go up and down somewhat from year to year, builders and local officials said.

So, those large projects that didn't occur last year may be in the pipeline this year. At least that's the case in Cheektowaga and Lancaster, according to town officials. Home builders also are hopeful about the coming year.

Sales were stronger than expected in December and quick to take off in January, which is unusual, builders said. Some project home construction this year will be a better year than 1998.

Still, it's early, and they're cautious.

"Honestly," Marrano said. "We don't see any major changes."

Total Construction (in millions)

Area 1998 1997 Change
Buffalo $92.1 $91.3 1%
Amherst $118.8 $149.1 -21%
Cheektowaga $36.8 $38.4 -4%
Tonawanda $20.6 $25 -18%
West Seneca $31.1 $18.3 70%
Hamburg $33.7 $34.4 -2%
Lancaster $44.9 $61.7 -27%
Orchard Park $35.8 $41.5 -14%
Soure: Buffalo News Research

Building trends

Commerical development dropped sharply in 1998 while residential construction increased but remained below 1996 and well below the national average.

1- and 2-family homes Commercial construction (in millions)
Area 1998 1997 Change 1998 1997 Change
Buffalo 232 115 101 $29.7 $31.6 -6
Amherst 114 82 39 54.2 68.7 -21
Cheektowaga 40 28 43 23 35.3 -35
Tonawanda 12 10 20 14.9 17.6 -15
West Seneca 90 72 55 13.4 4.9 173
Hamburg 139 107 30 9.3 8.5 9
Lancaster 199 206 -3 14.4 31.4 -54
Orchard Park 88 85 4 10.2 22.7 -55
Clarence 198 188 5 not available
Grand Island 41 50 -18 not available
SOURCE: Buffalo News Research

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