Connecticut Home Builders Find Ways To Survive

May 23, 2011

This recession began with the bursting of the housing bubble, and home building has been one of the industries hardest hit in its aftermath. Eighty percent of new houses in Connecticut are built by local, small construction companies. WNPR’s Harriet Jones went to find out how those survivors have reinvented themselves.

Elizabeth Verna, the co-owner of Wallingford-based Verna Properties is checking up on the final stages of a new home she’s building in a subdivision in the town.

“It’s been a long time since it’s been good in this industry.”

Verna has a unique perspective – as well as being a working builder, she’s also president of the Home Builders Association of Connecticut.

“These people are self-employed business people that are choosing to either lay off many people, or actually getting out of the industry altogether.”

And it’s not just the small builders themselves who have suffered.

“I may only employ on my payroll ten people, but I also generate business in the economy through hiring my architect, or my engineers, electricians, plumbers, sheetrockers, roofers, framers, decorators, real estate agents, so it really affects a lot of different parts of the industry and a lot of those workers are small business owners themselves.”

Verna says the key to her survival has been to listen to the new cost-conscious homebuyer who no longer wants a McMansion.

“We did a focus group initially before we started the project, and the consumer really told us that that was their number one item – energy efficiency and exterior maintenance-free homes.”

Verna says buyers in this subdivision want homes around 2,000 square feet, well down on the huge homes of the last decade. She doesn’t begin to build here until the home is sold. In Greenwich, Peter Fusaro of Preferred Builders specializes in luxury homes built on spec in lower Fairfield County.

“In the 24 years I’ve been in business I’ve never seen anything like this. I’ve gone through two recessions, but this one is really kicking us.”

He sells just one or two homes a year, and recently had one sit on the market for two years, while he reduced the price four times.

“I think that many of us who are in this industry have tried to reinvent ourselves.”

Bill Ferrigno of Sunlight Construction in Avon says most builders have diversified into remodeling and property management to make ends meet, and even in these times of modest recovery, take nothing for granted.

“Let’s say you’re experiencing a good month where you’ve sold a couple of houses. It’s usually followed by another couple of months where you don’t have anything to talk about.”

Reinvention applies to ancillary services too. Jay Cassineri works for Viking Kitchen Cabinets based in New Britain. Seven years ago 75 percent of his business was fitting out newly constructed homes, now that’s 25 percent of what he does.

"It would have been great to maintain all that new construction. It was really easy, and you had customers, and they would come in, and maybe there would be some upgrades and you’d move on to the next one, and you almost didn’t have to work very hard to gain the business, so we’re building a lot of character these days."

Frank Sanford’s business, lumber and materials supplier Sanford & Hawley in Unionville, has been in his family for four generations. He says the main growth areas he’s seeing currently are in green building.

“It’s the small, inexpensive changes are popular, and we’re also seeing a lot of interest in energy saving things such as better insulation, better windows, better doors, things of that nature.”

In some ways the recent recession reinforced a long-term trend in the state. In the 1980s Connecticut regularly saw 30,000 new housing permits issued each year. In the 1990s, that was down to around 12,000. In the first quarter of this year, 405 permits were issued. Homebuilder’s president Liz Verna.

“We as an industry need to educate the legislators and the leaders of Connecticut that we are job creators in this state, and where historically most economic recoveries have happened and started with the homebuilding industry, that is not necessarily happening right now in 2011.”

The Association is working with the Malloy administration to try to streamline the permitting process and reduce regulatory costs for builders.

For WNPR. I’m Harriet Jones.

CORRECTION: This story previously stated that the Home Builders Association of Connecticut had lobbied for a state-level home buyer tax credit. This is not the case. WNPR regrets the error.