A September Surge in Housing Starts
Increased Production in Riverside County Leads Major Increase in Construction Statewide, CBIA Announces
October 27, 2005
Contact:
John Frith
CBIA Public Affairs Director
(916) 443-7933 ext. 332
(916) 803-3005 (cell)
mailtto:jfrith@cbia.org
or
Deana Vladic
CBIA Communications Specialist
(916) 443-7933 ext. 346
dvladic@cbia.org
Note to Editors:A table listing housing production by metro area has been posted.
SACRAMENTO - Lead by a sharp increase in new-home construction in Riverside County, California housing starts showed a sizeable increase in September compared to August and September 2004, the California Building Industry Association announced today.
A total of 20,952 building permits for new homes and apartments were issued in September statewide, up 21.3 percent from August and up 20.9 percent from September 2004, according to figures compiled by the Burbank-based Construction Industry Research Board.
In Riverside County - by far the state's leading growth area - housing starts doubled in September to 4,140 new homes and apartments, compared to 2,049 in August. That accounts for nearly 56 percent of the statewide increase from August to September of 3,680.
Local BIA officials attributed most of the increase to continued strong demand for new homes, builders continuing to catch up from weather delays earlier this year and the fact that the workforce is finally catching up to demand in the region.
CBIA Chief Economist Alan Nevin said the September surge means housing production this year is on track to meet last year's 15-year-high level.
"I know it is a repetitive story, but 2005 production is right on target to match 2004's output in both the single-family and multifamily sectors," Nevin said. "Importantly, virtually all the metropolitan areas are maintaining a continual output, indicating a healthy economy through the state."
Nevin added that it was especially significant that multifamily production remains healthy, which he said indicates a growing number of affordable condominium projects under construction.
Single-family housing starts in September totaled 15,087, up 12.8 percent from August and up 20.5 percent compared to September 2004. Multifamily starts totaled 5,865, up 50.8 percent from August and up 22 percent from September 2004.
During the first nine months of 2005, total housing starts as measured by permits issued totaled 164,042, up 3.7 percent from the same period in 2004. Nevin said added that based on figures for the first nine months of this year, housing starts this year should come close to last year's 212,960, the most in 15 years. But even this production level is not enough the meet the constant demand for housing in California, said CBIA President and CEO Robert Rivinius.
"While construction remains on par with last year's levels, the fact remains that even more new homes and apartments need to be built to keep up with continued strong demand," Rivinius said.
"The state's population continues to grow by 500,000 to 600,000 people each year, so we need to be building nearly 250,000 homes a year just to keep up with demand. Until construction is able to keep up with demand, housing costs are likely to continue climbing," Rivinius said.
He said the Legislature must take steps to fix the problem or the housing crisis will worsen, and stressed that overregulation, excessive fees and the lack of available land for building all combine to hinder housing production. To increase the availability - and affordability - of housing, CBIA is sponsoring legislation that would increase homeownership opportunities by:
* removing regulatory barriers to housing production
* making sure that there's an adequate supply of land to build well-planned housing in all communities;
* streamlining the approval process to increase the supply of more-affordable higher-density homes and condominiums in the state's job centers
* and requiring local governments to provide more justification - and be more accountable - for the fees, ultimately paid by new-home buyers, that drive up the cost of each new home by tens of thousands of dollars.
# # #
(Note to editors: Building permits are considered to be an accurate way to track housing starts because builders generally don't pull their permits until they're ready to start construction due to the permits' high cost. Single-family homes may include townhouses and other forms of attached for-sale housing, while multi-family housing units include some condominiums, but the vast majority of single-family homes are individual homes and the vast majority of multi-family units are apartments.)
The California Building Industry Association is a statewide trade association representing more than 6,400 businesses - homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. A recent study determined that homebuilding generates approximately $60 billion a year to the California economy and creates an estimated 526,000 jobs statewide.
The Construction Industry Research Board (CIRB) is a nonprofit research center established in 1974 to provide statistical information on the California building and construction industry. More information is available on the CIRB Web site, www.cirbdata.com.
