June 24, 2008 — Building-permit figures from the Department of Planning and Natural Resources tell the tale of St. John's building boom gone bust, a sign of a declining economy both on St. John and the mainland.
So far this year, the department issued 37 building permits. A look at those permits shows only four are for single-family houses, with most appearing to be for local residents instead of the statesiders that fueled the building boom of the last few years. The rest are additions, alterations and things like pool decks.
This compares to 89 permits for all of 2007, when 46 of the permits were for single- or two-family homes. In the years 2005 and 2006, Planning issued 155 permits each year. In 2006, 66 were for single- or two-family homes. Of the 155 issued in 2005, 79 were for one- or two-family houses.
While construction continues across St. John, work is mainly on houses permitted in previous years.
The construction industry is definitely slowing down, said St. John architect Rob Crane.
"I'm getting contractors calling me looking for work," he said.
Laborers laid off from their construction jobs are also contacting him to see if he knows of anyone with any work for them.
Crane said he's doing okay this year, but he's a one-person operation who can only handle three houses a year. However, the work he now has is for properties that were in the family for decades, or for renovations.
Last year was terrible, Crane said, with the phone not ringing at all during the winter season, when people who want to build vacation homes typically call.
Real-estate sales figures also tell the tale of a declining economy. The number of houses on the St. John market sits at more than 120, an extraordinarily high number compared to several years ago, when homes sold quickly and at a good price.
Business is bad, with very few properties selling. According to Multiple Listing Service information, 11 houses sold so far this year. In 2007, a total of 29 sold. The year 2006 saw 33 houses sell, with 54 selling in 2005. In 2004, 43 sold, and in 2003, 61 sold.
So far this year, 13 parcels of land, sold compared to 24 all of last year. In 2006, 49 parcels sold, with 69 selling in 2005. In 2004, the number of parcels sold totaled 106. In 2003, 167 parcels of land sold.
Stateside buyers want fire-sale prices, but St. John sellers aren't lowering their prices much unless they were too "aggressively" priced to start, said Re/Max Island Paradise Realty Realtor Diana Beam.
"Most sellers are holding firm," she said.
The island's economic troubles are showing up across St. John. Some local businesses have closed their doors, with more expected to follow as the economy worsens.
"People who are marginal are not going to be able to hold themselves up," said Lonnie Willis, who owns several St. John businesses.
She ticked off a list of about 10 businesses that have closed in the last year. While many closed for economic reasons, others are shuttered, like Willis' Stone Terrace Restaurant, because the owners ran out of steam.
Willis said she and her husband, Albert, have been in the restaurant business a long time.
"My husband decided he didn't want to do it anymore," Willis said.
The business is for sale. The 2008 winter tourism season was the second bad one in a row when it came to the number of visitors and the amount they spent, Willis said. However, people who do visit continue to rent cars, but they aren't eating out and spending in shops, she said.
"They're cooking in the villas," Willis said.
The 4-percent gross-receipts tax and the escalating V.I. Water and Power bills add to the problem. It's a Catch 22 for business owners. If they raise their prices, they then must pay more gross-receipts tax.
The retail business all over St. John is down because visitors are spending less, said Radha Speer, who owns Caravan Gallery gift shop in Mongoose Junction.
"They're looking for good value and inexpensive gifts," she said.
And her staff has to work a lot harder than they used to when making sales, Speer said.
Willis, who moved to St. John in 1975, said that she went into business at a time when newcomers could buy homes and the buildings where they opened shop, but entrepreneurs who moved here in recent years were stuck paying high rents for their homes and for business space. This puts them at even greater risk for going out of business.
The high cost of housing also impacts businesses' ability to keep employees. Willis said she must rely on transient workers who only stay for a season because they can't find suitable permanent housing.
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