California Home Builders Pulling Back on New Construction, Deflating Hope for Relief to State’s Housing Crisis

An aerial view of homes under construction at a housing development on Jan. 31, 2019, in Petaluma, California. (Credit: Justin Sullivan/Getty Images)

An aerial view of homes under construction at a housing development on Jan. 31, 2019, in Petaluma, California. (Credit: Justin Sullivan/Getty Images)

Home builders are pulling back from new construction, the opposite of what economists say is needed to ease California’s housing affordability crisis.

A Los Angeles Times graphic shows home building permits in California over the past five years.

A Los Angeles Times graphic shows home building permits in California over the past five years.

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.

Read the full story on LATimes.com.

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