Building More Housing Would Help Solve State's Fiscal Problems, CBIA Tells Governor.

News/Business Editors

BURBANK, Calif.--(BUSINESS WIRE)--Nov. 2, 2001

At today's economic summit, the leader of California's homebuilders said the building industry was "ready, able, and willing" to be part of the state's economic recovery and asked Governor Gray Davis to call on local officials around the state to expedite, not discourage, the production of new homes.

"By promoting housing and homeownership around the state, we can help rebuild the economy and finally ease a decade-long housing shortage. There has never been a better time to promote housing -- it's a true win-win solution that won't cost the state a nickel," said Mick Pattinson, President of the California Building Industry Association.

Pattinson was one of the business, labor, and political leaders invited to Walt Disney Studios to discuss options for jump-starting California's lagging economy. He noted that the homebuilding industry is one of the pillars of the economy -- but that the industry could be contributing far more.

During 2000, more than 330,000 people were directly employed in the state's homebuilding industry, while another 830,000 people worked in related and induced jobs, according to the Construction Industry Research Board. The industry generated $28 billion to the economy -- nearly $69 billion including indirect benefits. As the Real Estate and Land Use Institute at California State University, Sacramento, reports, every $1 spent on residential construction produces $2.59 in economic output.

"As remarkable as these numbers are, if California had actually produced the housing construction it needed in 2000 -- 40 percent more according to the California Department of Finance -- nearly $40 billion more would have been pumped into the economy and some 200,000 more Californians would have been employed.

"And at a time when the state faces a multi-billion-dollar budget shortfall, it's important to remember that every home built in California generates tens of thousands of dollars in state and local tax revenues," Pattinson said.

He noted that California remains in a severe housing crisis brought on by 11 years of chronic under-production. While the state's population grew by an average of 600,000 people a year during the 1990s, housing construction was less than half that needed to accommodate the added population and job growth during the decade. As a result, the state is home to nine of the 10 least-affordable housing markets in the entire nation -- one reason California's homeownership rate of just 57 percent is third-lowest in the U.S.

Furthermore, Pattinson reminded attendees at the summit that the state's quality of life has suffered as more and more people are forced to spend hours commuting to and from work because the only affordable housing is located far from the state's job centers.

"Much of our state's housing woes are the direct result of failed regulatory and legislative policies that can and must be corrected, from excessive litigation that has stifled condominium production, to fiscal constraints that force cities and counties to favor retail developments over housing. Abuses of environmental policies and an increased `not-in-my-backyard' mentality have all but squandered new homeownership opportunities in the areas -- and for the people -- that are most in need," he said.

Pattinson urged the Governor to call on local officials around the state to expedite the processing of new home projects and to clear away impediments to development, and to issue an Executive Order directing state regulatory agencies to immediately review pending regulations to ensure they will not further increase the cost of housing.

"And when the Legislature returns in January, its leaders and its members should go to work immediately on a pending, comprehensive housing reform agenda -- sponsored by a broad-based coalition of concerned business, labor, housing advocacy and community organizations -- that simply removes unnecessary policy and regulatory obstacles to building homes that Californians can afford," he said.

The California Building Industry Association is a statewide trade association representing nearly 6,000 businesses -- homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. The building industry directly employs some 332,000 people and directly or indirectly generates nearly $69 billion a year to the California economy. More information about CBIA is available on its website, www.cbia.org.