Around Sonoma County, long-awaited housing projects finally get off the ground

Across the street from Rohnert Park’s Green Music Center, construction workers are transforming a wide tract of land into the largest homebuilding site for Sonoma County in years.

In the coming months, three separate housing companies are slated to construct a total of 175 single-family homes on what was once farmland off Rohnert Park Expressway. The three projects, the first to be built in the city in 15 years, comprise the start of a new University District neighborhood that one day could hold more than 1,600 housing units.

“It’s been a long, long time in Sonoma County since we’ve seen something like that,” said Randy Waller, broker/owner of W Real Estate in Santa Rosa.

The three University District projects are the largest among a score of developments poised to get underway in the county this year.

The number of new homes built likely will remain a fraction of what was annually constructed in the decades before a national housing crash. But after eight years of paltry results, builders and officials expect a jump in activity that is pushed by both strong demand and higher prices.

“We’re playing catchup,” said Keith Woods, chief executive officer at North Coast Builders Exchange, a Santa Rosa trade group. The activity won’t amount to a full rebound, he said, but “there is a really strong bounce-back underway.”

For decades, Sonoma County relied on homebuilding as a major engine of economic growth, one that employed thousands of construction workers and directly benefited home furnishing, appliance and landscaping companies.

But home construction tumbled sharply in the aftermath of a global financial crisis that was sparked by risky U.S. residential lending.

For a period of 20 years ending in 2007, county home builders on average constructed 2,500 houses, condominiums and apartments per year. Since then, the yearly average has plummeted to 580 units.

In the last five years, construction jobs have increased and the economy has expanded in the county. But residential building has remained slow to rebound.

Even last year, city and county officials issued building permits for just 236 new single-family homes, the lowest number in at least 45 years, according to the California Homebuilding Foundation.

For Rohnert Park, the dry spell began long before the housing crash, a reason city officials are looking with anticipation to the new subdivisions in the University District.

“These are the first single-family homes in Rohnert Park since the M Section in the early 2000s,” said Mary Grace Pawson, the city engineer and director of development services. The M Section neighborhood sits near the southern edge of the city.

The lack of construction has significantly limited the choices of home buyers seeking to buy either new or existing homes.

“The inventory situation in Sonoma County is one of the most dire in the Bay Area,” said Taylor Cohee, director of sales and marketing for Walnut Creek-based Ryder Homes homebuilders.

Ryder, which has built 1,000 homes in the county over the last two decades, will start work this summer on 21 single-family homes in east Petaluma with prices starting in the mid-$700,000s. The mobile sales unit for the Avila Ranch development likely won’t get set up on site until mid-August, but already 24 potential buyers have been pre-approved by the project’s lender.

“It’s definitely hit a nerve out there,” Cohee said of the project.

Similarly, more than 200 people have signed up early on an interest list for the 55-unit Aria Place project in northwest Santa Rosa, said Waller, whose W Real Estate is handling sales there. The project’s grand opening won’t take place until July, he said, with the single-family homes there starting at $475,000.

What held home building back after the housing crash was depressed home prices more than a lack of demand.

“The economics were not there,” said Waller. Buyers could purchase foreclosed homes and other properties for less than what it would cost builders to construct a new house.

But home prices have risen significantly in the last seven years. The county’s median single-family home prices hit a low of $305,000 in February 2009. But April ended with the median price at $569,500, just 9 percent below the record high of $619,000 set in August 2005.

Waller, who tracks new home projects, has counted more than 40 planned developments in the county that one day could accommodate over 5,000 units for single-family homes and condos. That includes more than 800 units for which builders theoretically could pull permits this year.

The actual number likely will be considerably less because “development projects are always, always, always behind” schedule, he said. But the level of preparation by developers leads him to believe an increase in activity is on the horizon.

“I actually think 2017 and 2018 are going to be very busy for new home construction,” Waller said.

In Santa Rosa, the number of permits for all commercial and residential construction to date this year is up nearly 10 percent over the same period for 2015, said Mark Setterland, the city’s chief building official. But new home construction seems to be lagging, he said, and some builders are pulling permits for just a fraction of their overall projects.

“They’re doing it in small pieces,” he said.

Setterland and others suggested that some of the slow pace may be related to the caution of lending institutions that provide construction loans for the housing projects. Having gone through the last housing downturn, lenders today not only want builders to make a persuasive case on the demand for a particular development, but they also may insist that the project be built a few homes at a time.

Woods and others say one challenge for builders this year is finding enough qualified construction workers and subcontractors. In that regard, Santa Rosa-based construction firm Synergy Group by Christopherson is benefiting now because it kept crews employed in the slower years by flipping homes and taking on home remodel projects.

“That is one way to guarantee that you get things accomplished,” said Brenda Christopherson, a partner in the company.

Around the county builders are getting projects underway.

Synergy Group, whose partners include Brenda Christopherson’s husband, Keith, and son, Andy, this month plans to start pouring foundations for the largest of its new home projects, 46 single-family homes and townhouses in Cotati.

The Village Walk community will be about two blocks from the town’s SMART train station and four blocks from the main plaza, Christopherson said. Prices will start in the low $400,000s.

In Healdsburg, El Segundo-based Comstock Homes has sold 14 of the 34 single-family homes being constructed at its Sorento Square project north of the town plaza off Healdsburg Avenue. The homes, which start at $699,000, are attracting those seeking either a primary residence or a second home.

“Healdsburg has become such a destination,” said Kathleen Westphal, community sales manager.

At University District in Rohnert Park, the three builders are Denver-based Richmond American Homes, Westwood-based KB Homes and Pleasanton-based Signature homes.

Representatives for KB and Richmond American voiced optimism about the opportunities in the county and the greater Bay Area.

KB is building developments in 15 communities ringing the bay, including San Francisco, San Jose, Hayward, Antioch, Vacaville and Petaluma.

“We have been very active in the Bay Area market, acquiring new land and opening new communities in some of the most desirable markets, including Sonoma County,” spokesman Craig LeMessurier said in a statement.

The company will build 60 single-family homes at its Cypress at University District development. Prices have not yet been released.

Similarly, Signature is preparing to build roughly 60 single-family homes at its Magnolia project in the University District. Prices have not yet been released.

Sales have begun for Richmond American’s 58-lot Mulberry at University District project. Division President Craig Merry said prices start in the low $600,000s, and the homes range in size from 2,400 to 2,800 square feet.

Merry, who has taken some “incredible bike rides” while getting to know the county, touted the subdivision’s location. It features expansive views of the eastern hills near Sonoma Mountain and sits across the street from a “world-class venue” in the Green Music Center, operated by Sonoma State University.

Richmond American strategically placed its division headquarters in Suisun City because of the opportunities the company sees in the North Bay, East Bay and Sacramento, Merry said. The location matters because all of its buyers spend a full day at its design center there making scores of decisions on the components and look of their homes.

Merry said Richmond American is actively seeking future construction projects here.

“I’d love to go into Santa Rosa,” he said. “I’d love to have a presence in multiple locations in Sonoma County.”

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.