Sonoma County home building on hold
Cesar Ontibros works on a home under construction at the new Taylor Mountain subdivision in southeast Santa Rosa this week. Taylor Mountain Inc. is one of the few active builders in Sonoma County, having taken out 14 building permits this year.
CHRISTOPHER CHUNG / The Press DemocratPublished: Friday, September 3, 2010 at 3:00 a.m.
Last Modified: Friday, September 3, 2010 at 10:31 p.m.
Only 132 single-family home permits were issued in Sonoma County for the first seven months of this year, down 40 percent from the same period last year and just a sliver of the 900-plus permits during the same period in 2006.
The numbers from the Construction Industry Research Board of Burbank amount to another sign that new home construction has hit bottom as home foreclosures keep prices depressed.
Only 25 single-family home permits were issued in Santa Rosa in the first seven months of the year, city planners said. County planners reported 87 single-family home permits in the unincorporated county. The rest were issued in the county's other cities.
“The hard data gives truth to the anecdotes that I hear constantly. There's very little going on out there,” said Keith Woods, chief executive officer of the North Coast Builders Exchange in Santa Rosa.
Builders hope for better times next year, he said. Even so, he said, they generally foresee “a long, slow, tortuous path to any kind of recovery.”
Home construction likely will remain low as long as so many foreclosured and other distressed properties are for sale, builders say. Such homes are selling for less than it costs to build one.
“When you're seeing those go for beneath replacement cost, it really does hold back competition,” said Aaron Matz, president of Taylor Mountain Inc., one of the few active builders in Sonoma County.
His company already has received 14 home permits this year and has houses under construction at its Taylor Mountain subdivision off Kawana Springs Road in southeast Santa Rosa. Matz said he plans to take out 10 more permits for that subdivision this year, plus 16 more for the Village Station subdivision off Sebastopol Road between Stony Point and South Wright roads.
At the Taylor Mountain subdivision, the company still has one 1,240-square-foot home selling for $339,950. But new models will total 1,500 square feet, will be on larger lots and will sell for $369,000, Matz said.
In all of 2009, California issued just 36,000 permits for new single- and multifamily units, the lowest in more than four decades. As recently as 2004, the state's builders took out 213,000 permits.
“Overall, the home-building industry is still going through a difficult time,” said Cheryl O'Connor, president and CEO of the Building Industry Association of the Bay Area.
“Home values have fallen so much” that many builders plan to delay new projects until next year, she said.
Neighboring counties are faring somewhat better than Sonoma County, as is the Bay Area as a whole, although their results are still far below historic trends.
Mendocino County issued 76 new home permits for the first seven months of 2010, up from 59 for the same period a year earlier. Lake County issued 29, down from 31 a year earlier, according to the research board.
Santa Rosa also issued 151 multifamily unit permits between January and July.
The city and the research board recorded a total of 176 single- and multifamily permits in Santa Rosa but differed in their breakout. City planners reported 13 fewer single-family permits and 13 more multifamily permits than the research board.
Among the other eight Sonoma County cities, planners issued a total of only seven single-family home permits, according to the research board.
The Bay Area reported a total of 2,326 permits for new single-family homes in the first seven months of 2010, up 22 percent from a year earlier. California's results were up 7 percent to 15,288 permits, according to the research board.
Condo and apartment construction in California was up 51 percent to 10,468 units for the first seven months of the year. Ben Bartolotto, research director for the research board, said the jump is due partly to demand for senior citizen housing and for apartments, he said.
Construction of all kinds remains down for both Santa Rosa and the county.
For the unincorporated areas, the county reports nearly $141 million in total valuation for all residential and commercial construction in the 2009-2010 fiscal year, which runs from July 1 to June 30. That compares with $225 million for the previous year.
The city reported $83 million in total valuation for 2009-2010, compared to $128 million for 2008-09.
One bright spot for the city is that the total valuation for July was $8.9 million, compared to $4.6 million for July 2009. County revenue for July totaled nearly $518,000, compared to nearly $503,000 in July 2009.
To help builders, officials for Santa Rosa and the county are delaying the collection of certain impact fees. Builders previously paid such fees when they received the building permit, but now they can wait to pay until just before final inspection.
In Santa Rosa, builders could delay paying up to $50,000, depending on the section of town in which the project is located, said Community Development Director Chuck Regalia.
In the county's unincorporated areas, a builder could delay paying about $38,000 in fees on a 3,000-square-foot home, said Patrick Mullin, customer services supervisor for the county's Permit and Resource Management Department.
Woods of the Builders Exchange said, “The city and the county get great credit for trying to help out a troubled industry.”
Staff Writer Robert Digitale blogs about local real estate at realestate.blogs.pressdemocrat.
com. He can be reached at 521-5285 or robert.digitale@pressdemocrat.com.
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