Lead by a sharp increase in new-home construction in Riverside County, California housing starts showed a sizeable increase in September compared to the previous month and year-ago levels, the California Building Industry Association announced Thursday.

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 Burbank, Calif.-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 with 2,049 in August. That accounts for nearly 56 percent of the statewide increase from August to September of 3,680.

Local CBIA 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.

“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.

The California Building Industry Association is a statewide trade association representing more than 6,400 businesses comprised of home builders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. 


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