Report: Sonoma County home construction in 2016 best since 2007

After a long dry spell, Sonoma County builders last year created the largest number of new single-family homes in almost a decade.

In 2016, county and city governments issued permits for ?581 single-family homes, according to the California Homebuilding Foundation in Sacramento. The last time more homes were built here was in 2007, when ?904 permits were issued. Last year’s permit total was 236.

The construction industry remains a major employer and a significant contributor to the county economy in that way. In recent years, business and civic leaders have also looked to builders to help address a housing shortage they say is so dire it threatens to become a drag on the economic health of the region.

From that perspective, builders and others said the current level of construction activity remains well below average. And there are few reasons to expect it to increase dramatically anytime soon.

“There’s still headwinds out there for private builders and developers,” said Keith Christopherson, a longtime builder and a partner in Synergy Communities by Christopherson of Santa Rosa. For many, capital and suitable land remain in relative short supply, and most are wary of the possibility they could face another economic downturn with unsold units.

The foundation’s housing data also showed a jump in home construction in Lake County, where massive fires destroyed roughly 1,500 homes over the past two summers. Builders there pulled ?242 single-family building permits last year, compared to 69 in 2015.

In Sonoma County, industry and government officials said construction has increased as home prices rebound from the historic crash that accompanied the last recession. The county median home price hit a low of $305,000 in February 2009. But the median price has risen markedly for five years and in March hit a new record high of $639,000.

“We’re into a year-and-a-half rebound,” Keith Woods, chief executive officer at the North Coast Builders Exchange, a Santa Rosa trade group, said of the building sector.

Even so, he cautioned the current level of construction remained well below what would satisfy the current demand for housing.

“It’s a dent,” Woods said, “not a solution.”

In a 20 year-period from 1987 to 2007, local governments issued an annual average of 1,900 building permits for single-family homes in the county. In the subsequent nine years, that average fell to fewer than 370 permits a year.

For builders, “it was kind of a lost decade,” Christopherson said.

Even now, he said, his company takes a conservative approach to building new units. For several years it has included remodeling and flipping homes as part of its business strategy.

Synergy’s biggest project today is the 46-unit Village Walk townhouse and single-family home development on East Cotati Avenue in Cotati. The homes, which range in price from the mid-$400,000s to the low $600,000s, lie a few blocks from that city’s future SMART rail station and within 200 yards of a Starbucks and Oliver’s Market.

“It’s really the epitome of a walkable community,” Christopherson said.

The prolonged decline in building activity in the county contributed to a significant shortage of available housing for both renters and buyers. Demand led to higher prices, which in turn persuaded both builders and lenders of the financial viability of new home construction.

“The housing crisis has gotten to the point where builders can finally build their projects ... and turn a profit,” said Randy Waller, broker/owner of Santa Rosa’s W Real Estate, which specializes in new home sales.

In the county, Rohnert Park is the city with the most evidence of construction activity. Three builders have already pulled permits for about 175 homes in the University District area off Rohnert Park Expressway near Sonoma State University. And in the southeast area near Bodway Parkway and Valley House Drive, home construction on another 107 homes could start this spring, said Mary Grace Pawson, the city’s development services director.

Together the two areas are approved to one day hold more than 2,100 new housing units.

“I think both developers are projecting build-out over an eight- to 10-year period,” Pawson said.

In Santa Rosa, the city Planning and Economic Development department reported issuing permits for 296 new housing units last year. Another ?685 units are under review for a building permit and more than 2,200 others are being considered for some sort of discretionary approval.

“We have a number of projects that are winding through the system,” said Mark Setterland, the city’s chief building official. A few were previously approved but not built and now are being updated to meet current building codes.

To address the need for more housing, county supervisors have also called for building new units on surplus county land along Chanate Road and off West College Avenue. And Santa Rosa council members have said they want to encourage the construction of 5,000 new housing units in the next eight years.

Along with data on single-family homes, the homebuilding foundation reported the construction last year of 264 multi-family units in the county, compared to 206 in 2015. The annual average for the 20 years ending in 2007 was 605 such units.

In Lake County, building officials report that as of March they had cumulatively issued permits for 251 single-family homes and 72 mobile homes in the area ravaged by the 2015 Valley Fire, plus another six single-family homes and 13 mobile homes for the area hit by last summer’s Clayton Fire.

County Supervisor Moke Simon, who represents such hard-hit communities as Middletown and Anderson Springs, acknowledged that a portion of the destroyed homes in those areas likely won’t be rebuilt. Even so, he pointed to the construction now underway and predicted even more activity this year.

“I’m positive this building season will really ramp up,” he said.

Among his reasons are $7.2 million in state loans, plus efforts by relief groups, including Habitat for Humanity and Hammers for Hope, to help the neediest property owners construct new homes.

The effort likely will take five years, Simon said, but “we will rebuild better than we were before.”

The foundation also noted that builders in Mendocino County received permits last year for 69 single-family homes, compared to 85 in 2015. No multi-family homes were built there in 2016, compared to two in the prior year.

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com.