SACRAMENTO – Total housing production in California in 2008 was at the lowest level on record, the California Building Industry Association announced recently, prompting CBIA officials once again to urge state and federal lawmakers to act immediately to stimulate the housing sector and the economy.
CBIA said just 65,380 permits were issued statewide last year for new homes, condominiums, townhomes and apartments, down 42 percent from 2007 and down a staggering 69 percent - 147,580 units – compared to 2004, the peak of the current cycle.
Robert Rivinius, CBIA’s President and CEO, said the dismal production numbers should send a clear signal to state and federal lawmakers to immediately enact stimulus measures to reinvigorate the depressed housing market and in doing so, help the entire economy recover more quickly.
“We continue to believe that the best solution to the current depression in the homebuilding industry is to create a tax credit for new-home buyers, which in the past has proven to be an effective means of quickly jump-starting housing construction, which is such an important part of the state and national economy,” Rivinius said.
He noted that after Congress enacted a temporary homebuyer tax credit during the 1970s when faced with a similar downturn, home sales doubled within months of its enactment and within two years, new housing construction was back to normal levels nationwide. CBIA is working hard to persuade both state lawmakers and Congress to enact such credits as quickly as possible.
According to statistics compiled by the Construction Industry Research Board, single-family permits in 2008 totaled 33,048, down 52 percent from 2007, while multifamily permits totaled 32,332, down 28 percent from the previous year.
For the month of December, permits totaled 4,973, down 34 percent from December 2007 and up 7 percent from November. Single-family permits totaled 1,978, down 45 percent when compared to December 2007 but up 36 percent from the previous month, while permits were pulled for 2,995 multifamily units, down 24 percent from December 2007 and down 7 percent from the previous month.
Rivinius noted that California’s lagging economy is not likely to recover until homebuilding begins to recover.
“Studies show that the state economy benefits greatly when housing production is operating at healthy levels,” Rivinius said. “Because homebuilding has declined so dramatically, California has lost nearly 300,000 jobs and $46 billion in economic impact in just the last three years, enough to plug the budget deficit and lift our economy out of the doldrums.”
Rivinius said that lawmakers need to consider these facts when grappling with budget shortfalls and seeing headlines of continued job losses in our state. He also stated that it is critical for banks to work with builders on existing projects and again loan funds for new housing projects.
“New-housing construction creates jobs, generates revenue for state and local coffers and puts California back on the path to economic recovery. We need our lawmakers to act now to help our industry and in doing so, the entire economy.”