Despite a decline in housing starts during October, housing construction for the year is expected to exceed production recorded in 2004, the California Building Industry Association reported.

A total of 14,425 building permits were issued in October statewide, down 32.3 percent compared to September and down 15.8 percent from October 2004, according to figures compiled by the Burbank-based Construction Industry Research Board.

CBIA Chief Economist Alan Nevin predicts a decrease in starts for the remainder of the year.

“It is likely that permit activity will slow down in November and December, but even with that traditional year-end downturn, the industry will have produced a voluminous and broad range of single-family homes, condominiums and rental apartments in 2005,” Nevin said.

CIRB Research Director Ben Bartolotto said the drop-off in permits – which followed a surge in permits issued in September – may have been caused at least in part by builders pulling permits early because of new and more costly energy efficiency standards that went into effect on Oct. 1.

Single-family housing starts in October totaled 11,120, down 27.6 percent from September but down just 3 percent compared to October 2004. Multifamily starts totaled 3,305, down 44.4 percent from September and down 41.8 percent from October 2004.

CBIA Chairman Layne Marceau, a San Francisco Bay Area home builder, said that while home builders are all but certain to produce about 213,000 new homes, condominiums and apartments in 2005, the supply continues to fall short of the demand, and the pinch will continue to be felt by prospective home buyers.

“California’s population continues to grow by 500,000 to 600,000 people each year, and in order to keep up with the constant demand, nearly 250,000 new homes need to be built each year,” Marceau said. “Until regulatory barriers at the state and local level are removed to allow production to finally keep up with demand, the state’s housing affordability crisis will continue.”

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


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