Housing production in California finally broke through the 200,000-unit barrier in 2004 for the first time since 1989. Even with production at a 15-year high, the state’s home builders still did not build enough new homes and apartments to meet housing needs, the California Building Industry Association reported today.

According to preliminary year-end data compiled by the Construction Industry Research Board, housing starts as measured by building permits totaled 210,527 during 2004, a 7.6 percent increase over 2003. The total includes 150,344 single-family homes (up 8.3 percent from 2003) and 60,183 apartments and condominiums (up 5.7 percent).

To put the numbers into context, 2004 marked only the third time since 1980 that single-family production exceeded 150,000 homes, and was the most housing starts since 1989, when 237,747 building permits were pulled.

“Production of more than 210,000 units is strong evidence of the confidence in the state’s economy as well as the demand for ownership homes and condominiums. We are convinced that, as a state, we could absorb as many as 40,000 more units annually without upsetting the supply/demand balance,” said CBIA Chief Economist Alan Nevin.

Steve Doyle, 2004 CBIA President and a San Diego homebuilder, said the industry could finally meet the statewide housing need if state and local barriers that restrain production and drive up costs were removed.

“State law all but encourages opponents of housing to try and defeat or at least delay the building of new homes and apartments around the state, both in our cities and in suburban areas,” Doyle said. “These laws need to be reformed to ensure that both the state’s housing needs and the environment are protected.

“In addition, many cities and counties have such cumbersome development plans that it can take years for properties to be properly zoned and permitted to allow new housing to be built, which is why both CBIA and the Schwarzenegger Administration are working on proposals to ensure that every community plan for their next 20 years’ growth needs.

“It’s like the Governor said in his State of the State address this year – the state must eliminate the regulatory and legal hurdles that delay construction and increase the costs of new housing,” Doyle concluded.

During 2004, single-family housing production was greatest in the Inland Empire, Sacramento, Los Angeles, San Diego and Bakersfield.

Multifamily housing production in 2004 was greatest in Los Angeles, Inland Empire, San Diego, Orange County and East Bay.


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