The California Building Industry Association announced Thursday that the number of permits issued for single-family homes in the state were up 19.8 percent from March 2003 to March 2004, and were up about 35 percent from February to March of this year. The statistics were collected by the Construction Industry Research Board, a nonprofit research center.

In the first three months of the year, the number of single-family permits issued increased 6.4 percent over the number of permits issued in the first three months of 2003, the association reported. Significant growth in permit issuance in the first three months of 2004 over the first three months of 2003 was reported in the Bakersfield (up 18.1 percent), Los Angeles-Long Beach-Glendale (up 21 percent) and Stockton (up 14 percent) areas, with a major downward trend in single-family permit issuance in the San Diego-Carlsbad-San Marcos (down 12 percent) area.

Multi-family permits, meanwhile, are down 13.2 percent in the first three months of 2004 when compared with the first three months of 2003, from 14,962 to 12,9994.

The drop-in multi-family permits was significant in the San Jose-Sunnyvale-Santa Clara, Oakland-Fremont-Hayward, San Diego-Carlsbad-San Marcos and Santa Ana-Anaheim-Irvine areas of the state, while the Riverside-San Bernardino-Ontario area experienced significant gains in multi-family permits during the same period.

The Construction Industry Research Board projects California housing starts will increase 3.1 percent in 2004, to 201,500. If the projections are accurate, it would mark the first time since 1989 that state housing starts surpass 200,000.

Sherman D. Harmer Jr., association president, said that although the overall numbers look good, “The fact remains that our industry will not build enough homes and apartments this year to meet the growing demand for housing, let alone enough to start cutting away at the state’s accumulated housing deficit.

“While more and more local officials are turning to ill-conceived government programs to solve the housing affordability crisis, they need to remember that until housing supply balances with demand, prices for new and existing homes will continue to climb, putting the American Dream of home ownership further out of reach for more working families,” he added.

“Due to growth control, high fees, and a scarcity of land that’s approved for development in most of the coastal metropolitan areas, more and more California families wanting to buy a home have been turning to the Valley and the Inland Empire, where development is still welcome and homes affordable,” Harmer said.

A growing number of cities in the Bay Area and southern California have enacted inclusionary zoning ordinances that require builders to provide a certain percentage of new homes at below market cost, though Harmer said a study by economics experts at San Jose State University shows that inclusionary zoning policies can curb the housing supply and drive up housing costs.

“Complicated government programs won’t solve the housing crisis – making it possible to build enough homes at all price points is the only solution to the problem,” he said. The full report and report summary are available online.


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