Home builders are pulling back from new construction, the opposite of what economists say is needed to ease California’s housing affordability crisis.
In the first six months of 2019, builders gained approval for 51,178 new homes in California, nearly 20% fewer than the same period a year earlier. That puts the state on track for the first meaningful annual decline since the recession.
In the Los Angeles-Orange County metro area, total permits — an indication of future construction — fell by 25%, according to data from the U.S. Census Bureau. Single-family permits dropped 18.5% in the region, while those for multifamily projects such as apartment buildings — a category in which activity tends to be more volatile — fell 28.6%.
“We are going in exactly the wrong direction,” said Christopher Thornberg, founding partner of Beacon Economics.
Economists, developers and trade groups said the slowdown in permits has a simple explanation: It’s become harder to make money building homes.View Article