New-Home Production Continues Decline in November
Report finds single-family housing starts at lowest November level in 26 years
December 21, 2007
SACRAMENTO — Production of new housing in California declined further in November as homebuilders continued to take steps to reduce inventory before year-end, the California Building Industry Association reported today.
Total housing starts in California, as measured by building permits issued, dropped 45 percent in November when compared to the same month a year ago to 5,498, according to housing permit data supplied by the Construction Industry Research Board. Production of single-family homes fell nearly 50 percent while construction of multifamily units decreased 36 percent when compared to November of 2006.
In November, permits were pulled for just 3,151 single-family homes statewide, down 50 percent from November 2006 and down 21 percent from the previous month, while multifamily housing starts — condos and apartments — totaled 2,347, down 36 percent from November 2006 while dropping 41 percent from the previous month. According to CIRB statistics, the single-family production level last month was the lowest recorded during November since 1981, when just 2,452 permits were pulled across the state.
During the first 11 months of the year, production began on 105,002 homes and apartments, down 31 percent from the same period last year. Single-family housing permits for the year are down 37 percent, while multifamily starts are down 21 percent for the year.
CBIA President and CEO Robert Rivinius said he hopes state lawmakers will take a much-needed look at making home production more feasible when grappling with the $14 billion deficit projected for California’s budget next year.
“The homebuilding industry has been a major economic engine for most of the past decade,” Rivinius said. “However, with ever tightening regulations and restrictions put on homebuilding, the industry is no longer generating the employment and tax revenues it had been in the early part of this millennium.
“It would only make sense for policymakers to address the over-regulation put on homebuilding and to ease restrictions while streamlining the homebuilding process to help jump-start the economy and put much-needed revenue back into state and local coffers, which by the looks of things, is urgently needed,” he said.
Rivinius also noted that a number of local jurisdictions continue to increase fees imposed on the construction of each new home even during a downturn in the market, further hampering the ability of working families and first-time buyers to be able to afford their first home.
“Reducing or even eliminating some of these fees, which in more and more cases can exceed $100,000 per home or condominium unit, would go a long way in getting the economy back on track and at the same time help thousands of Californians attain the American Dream of homeownership.”
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The California Building Industry Association is a statewide trade association representing more than 7,000 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. More information is available on the Association's Web site, www.cbia.org.
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.
