Work has re-started on a Healdsburg housing project, providing another sign of life for the battered home-building industry.

D.R. Horton, the nation's largest homebuilding company, acquired the property on Grant Street more than two years after work stopped on the partially built project begun by a previous developer.

This week, D.R. Horton gained the approval of the City Council to go ahead with a slightly revised project that by the time it's completed will provide 37 single-family homes, including six low-income units.

"It's a positive thing for the community," said Mayor Gary Plass. "It's not positive to have a half-built project sitting dormant. And it will help with affordable housing stock."

Initially proposed by New Healdsburg Venture, a limited partnership including developers Robert O'Neel and Clint Wilson, the Grant Street Village was approved in 2006 by the City Council on a formerly dilapidated site that had a metal warehouse and homeless and migrant encampments.

Just 10 homes were partially completed before work stopped in 2010.

"The previous developer was a casualty of the economic recession," said Barbara Nelson, the city's planning and building director.

She said D.R. Horton purchased the 4.8 acre property across from the railroad tracks and Foss Creek through the bankruptcy court when the project was in receivership.

The subdivision was re-christened "Sonata."

As the largest homebuilder in the country, according to Builder Magazine, the company boasts a strong financial position despite the downturn in the housing market over the past five years.

D.R. Horton, said Nelson, is "a very experienced homebuilding company. It's a great opportunity for Healdsburg to get a good project."

"I've seen this project sitting there a long time," said Councilman Shaun McCaffery. "I like to see it going again."

A spokeswoman for the company said Thursday that substantial improvements were made to the partially completed homes since escrow closed on the purchase in August.

New windows were put in, appliances were replaced with more current models, backyards were cleaned up and front yard landscaping installed.

Two-bedroom plans were redesigned to provide a third bedroom.

Company spokeswoman Jessica Hansen said "we anticipate offering them for sale in mid-January," although sales prices have not yet been finalized.

She said construction of the remaining 25 homes, which range in size from about 1,500 to 2,000 square feet, should be completed by end of 2013.

The project will also include a small public pocket park at the intersection of a proposed new street and Healdsburg Avenue, where there will be a new bus transit pad and shelter built, as well as placement of a public art sculpture.

The stalled subdivision represents the type of projects that are getting new life as the economy improves.

"Those shuttered subdivisions that went under with the crash, those are the lots builders are picking up," said Lori McGuire, an analyst with the California Homebuilding Foundation. "Builders I'm talking to say their biggest struggle now is finding finished lots, especially in the Bay Area."

McGuire said there are "definite glimmers" of hope in the home construction industry. "Builders are ramping up. Builders are hiring again," she said.

A report issued this week by the Sonoma County Economic Development Board had an upbeat forecast for the home construction industry.

This year's 388 permits are down from the 449 single-family home construction permits issued in 2011.

But the report predicts a 79 percent increase to 694 permits next year, followed by a surge to 1,534 permits in 2014 — nearly matching the 1,598 issued in 2005 before the housing market collapsed.

D.R. Horton spokeswoman Hansen said the company anticipates nationally that its number of housing projects will increase five to 10 percent in fiscal 2013 compared to fiscal 2012.

"We're excited by the opportunities we see in fiscal 2013 and beyond," she said, singling out a highlight of the company's year-end summary.

(You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com.)