Housing Starts Fall Significantly in November
December 27, 2005
Contact:
John Frith
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Deana Vladic
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(Note to editors : A table listing housing production by metro area has been posted in the Newsroom section of the CBIA Web site.
SACRAMENTO - Housing starts fell significantly in November in most parts of California, but starts for the year are exactly on pace with 2004's robust numbers, the California Building Industry Association reported today.
CBIA Chief Economist Alan Nevin said the November drop-off was due in part to the need of builders to sell homes built or under construction.
"The November figures for single-family homes are down, but on a year-to-year basis are still up 5,000 over 2004," Nevin said. "The slowdown in November will give builders an opportunity to clear out their standing inventory."
During November, housing starts as measured by building permits issued for single-family homes totaled 9,405, down 17.2 percent from October and down 18.0 percent from November 2004, according to figures compiled by the Burbank-based Construction Industry Research Board (CIRB).
Multifamily starts were up by 34.1 percent compared to October, to 4,616, but down 36.1 percent from November 2004. In all, builders started construction on 14,021 homes, condominiums, and apartments in November, down 5.3 percent from the previous month and down 23.6 percent from November 2004.
CIRB research director Ben Bartolotto attributed part of the decline to the continued effect of the large increase in permits issued in September, just before new, more-expensive energy efficiency requirements went into effect October 1.
On a year-to-date basis, Nevin noted, total permits were almost exactly even with the first 11 months of 2004 - 193,562 this year compared to 193,652 last year.
"Overall, through the first 11 months of the year, the total permits pulled are identical to those of 2004. We anticipate that 2005 will conclude with figures matching 2004, which was a very good year for the industry," Nevin said.
Still, the softening production figures raise concerns that the state's worsening housing affordability crisis is now limiting new construction, said Robert Rivinius, CBIA's President and CEO.
"For the past several years, housing production has grown rapidly but has never caught up with demand," Rivinius said. "That gap between supply and the need for new homes and apartments to house our state's rapidly growing population has been the primary cause for spiraling housing costs, and it may be that we've reached a point where affordability is so low that production is going to decrease.
"Our Legislature and other policy makers must stop their short-sighted efforts to make building new homes even more difficult and more expensive, and resolve to take long-overdue action in 2006 that will increase housing opportunities for all California families."
Those actions include:
* 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.
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The California Building Industry Association is a statewide trade association representing some 6,500 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.
