Report: New Bay Area housing construction declined 30 percent in 2019

In San Francisco, the number of units built fell by 1,841, the most behind Santa Clara County and Alameda County. The drop in Santa Clara County was 3,333 and in Alameda County it was 2,455. (Photo courtesy of The Bay Link)

Despite a narrative that housing construction in the Bay Area is going gangbusters, the number of units built last year was nearly 10,000 shy of the year before, according to preliminary data from the Construction Industry Research Board and assembled by Bay City News Service.

Two people familiar with the state’s and Bay Area’s housing crisis said fees and delays for various reasons are behind the 9,880-unit decrease in housing construction.

“We still have very anti-housing policies,” said state Sen. Scott Wiener.

He said the approval process for a unit of housing can take three to five years and in San Francisco the charges and fees for a housing unit come to $165,000.

“We still have a system that’s designed to fail,” said Wiener, D-San Francisco.

In San Francisco, the number of units built fell by 1,841, the most behind Santa Clara County and Alameda County. The drop in Santa Clara County was 3,333 and in Alameda County it was 2,455.

Dan Dunmoyer, president and CEO of the California Building Industry Association, a trade association representing single-family and multi-family homebuilders, said that statewide, 7 to 8 percent fewer units of housing were constructed in 2019 than in 2018.

“It’s interesting and profound,” Dunmoyer said.

It’s the first year the numbers have been down since the Great Recession, he said, adding that there is great demand for housing.

But like Wiener, Dunmoyer said fees and delays due to lawsuits and endangered species concerns, among other reasons, are probably behind the drop. Fees that Bay Area cities charge developers for building housing range from two to three times to six to eight times what cities in places like Phoenix and Salem, Oregon, charge, he said.

Outside of California, developers pay about $6,000 to $15,000, while the cheapest fees in the Bay Area are $45,000 to $50,000, he said, and the homebuyer ultimately pays the fees.

Delays caused by regulations at the local level are being addressed at least to some extent by numerous changes to state law, said Daniel Saver, assistant director of housing and local planning at the Association of Bay Area Governments, a regional planning board and local government service provider.

“The state’s perspective appears to be that there is a need to simplify and streamline local laws that slow down housing construction,” Saver said.

“The stated intention is to make it so developers don’t have to jump through so many hoops,” he said.

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