California homebuilding permits drop, but decline was less than US slide

“Swift swings” takes a quick peek at one economic trend.

The number: Permits for new California housing dipped slightly in 2023 – but it was still better than the national norm.

The source: My trusty spreadsheet looked at the National Association of Home Builders’ tally of housing permits last year, comparing that with 2022 for all US states and the District of Columbia.

Quick analysis: California builders filed 111,221 permits last year (No. 3 among the states). That was off 6% from 2022 – but that dip was still the 16th-best performance nationally.

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Of those California permits, 57,959 were for single-family houses (No. 4 nationally) – off 8% in a year (No. 31). California multifamily permits totaled 53,262 (No. 3) – off 3% (No. 16).

Elsewhere in the US, 1.26 million permits were pulled in the 49 states and D.C. That’s off 11%. Just nine states had increases.

Single-family permits were 851,268, off 6%. Only six states were up for the year.

Multifamily permits totaled 508,107, off 19%, with 15 states having increased filings.

Bottom line

Developers often complain that homebuilding is frequently limited by bureaucratic hurdles. But 2023 was far more about a cloudy economic outlook, a mortgage rates jump, and fears that too many apartments were being built.

Note that last year’s California permits equaled 2.8 per 1,000 residents, the lowest ratio since 2020. Yet, it’s also above the average 2.2 permits per 1,000 residents pace since 2008.

Remember, the Great Recession changed how builders build. From 1990 to 2007, California permitting averaged 4 per 1,000.

Locally speaking

Here’s how California’s biggest homebuilding markets fared within the nation’s 100 most-active metropolitan areas for permitting. Ponder the geographic divide, with southern metros having a combined 6% increase in permits vs. a 10% drop to the north …

Los Angeles-Orange County: 30,691 overall permits in 2023 (No. 7 of 100) – off 6% vs. 2022 (No. 46 change of the 100). Single-family houses? 11,810 permits (No. 14) – up 7% (No. 10). Multifamily? 18,881 permits (No. 5) – off 13% (No. 50).

Inland Empire: 19,710 overall (No. 17) – up 21% (No. 11). Houses? 11,924 (No. 13) – off 2% (No. 39). Multifamily? 7,786 (No. 20) – up 89% (No. 10).

Sacramento: 11,917 overall (No. 29) – up 11% (No. 15). Houses? 7,941 (No. 24) – off 2% (No. 41). Multifamily? 3,976 (No. 35) – up 54% (No. 14).

San Diego: 11,468 overall (No. 30) – up 21% (No. 10). Houses? 3,048 (No. 66) – off 13% (No. 75). Multifamily? 8,420 (No. 18) – up 42% (No. 15).

San Francisco: 7,478 overall (No. 39) – off 32% (No. 93). Houses? 3,037 (No. 67) – off 6% (No. 52). Multifamily? 4,441 (No. 32) – off 43% (No. 81).

San Jose: 6,288 overall (No. 51) – off 7% (No. 51). Houses? 2,200 (No. 89) – off 40% (worst of the 100). Multifamily? 4,088 (No. 33) – up 32% (No. 17).

Fresno: 3,223 overall (No. 90) – off 12% (No. 62). Houses? 2,398 (No. 85) – off 17% (No. 90). Multifamily? 825 (No. 83) – up 5% (No. 31).

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Source: Orange County Register