According to California's Building Industry Association, fewer new homes will be built in California this year than in any year since World War II.

This news was announced at the recently held Pacific Coast Builder's Conference by CBIA president Bob Rivinius.

Rivinius went on to say that things are troubled in the building industry and that their estimates point to the need for 230,000 new homes a year just to keep pace with the demographic demand. The forecast for the number to be built? Only 72,000 new homes, even with a continually growing population.

In a California Department of Finance Report, chief economist Alan Nevin found that the state had added 490,000 people in the last year, not including illegal immigrants. He also added that every other industry in the state except for homebuilding was doing well.

The forecast for newly built homes was originally much higher, but Nevin admitted that no one expected the rising amount of short sales and foreclosures as well as through-the-roof gas prices, hindering commuter markets.

Nevin also noted that someone working in Los Angeles can save $100,000 on the price of a home if they live in Bakersfield, but they' be spending and extra $1,000 per month to commute.

CBIA chair Ray Becker said the loss of jobs in construction and related industries amounted to 181,300 over the past two years, threatening the entire state's economy. Becker is lobbying for state and local governments to make reforms, extending the life of subdivision maps, deferring impact fees and is also urging the powers-that-be to take into the account the effect any new legislation would have on housing.

Without reform, he warns, many builders will go out of business, crippling the industry's ability to respond once the market turns.

Published: July 15, 2008

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