Homebuilding’s Vital Role in Difficult Economic Times

Amid the coronavirus pandemic, our nation is facing a tremendous amount of uncertainty when it comes to the health of our residents and the future of our economy. Skyrocketing unemployment, coupled with a volatile stock market, has led to one of the most fragile economic periods in history.

 

Before the coronavirus outbreak, the most pressing issue in California was how to address the state’s severe affordable housing crisis. Now the two crises have converged, placing the state at a major crossroads when it comes to providing housing for its residents.

 

As part of their coronavirus crisis response measures, various cities and counties across the state have begun implementing partial government shutdowns. Regrettably, many of these measures drastically limit or outright stop local government from conducting services needed to build new homes, including reviewing construction plans, issuing permits and conducting inspections. These shutdowns are in disregard of Gov. Gavin Newsom’s executive order that explicitly recognizes housing construction as an essential critical infrastructure that needs to continue during the state’s stay-at-home order.

 

If cities and counties bring new home construction to a grinding halt, it will worsen the housing affordability crisis that has plagued the state for years. We must also acknowledge that before the coronavirus pandemic, California was facing a potential mass exodus of its present and future workforce due to the lack of affordable housing.

 

Over the last two years, the Public Policy Institute of California found that one-third of Californians were seriously considering leaving the state due to the high cost of housing. This has been a major concern for businesses across a variety of industries.

 

If local governments limit the ability to build new housing in this turbulent economy, we will have created a self-inflicted crisis that we will regret for decades. Faced with a weak economy, residents already struggling with the state’s high cost of living will simply pack up and leave.

 

Our elected leaders must recognize that new housing construction is more important than ever. When homes are being built at a robust pace, a thriving housing construction industry has shown to be a considerable economic driver. A study funded by the California Homebuilding Foundation found that the industry’s most recent peak came in 2005 with new home construction supporting over 486,000 jobs and generating an economic output of over $67 billion.

 

We understand these are unprecedented times and that our elected leaders are doing their best. However, now is the time for government to encourage new home construction, not limit it.

 

Fortunately, local elected officials in several Southern California cities such as Irvine and Glendora have chosen to work to avoid disrupting their residential construction approval processes. Instead, they have worked with the homebuilding industry to implement creative new approaches such as virtual home inspections and electronic plan submittals. The city of Anaheim took the proactive approach of approving an economic stimulus package that includes the potential for significant regulatory relief and incentives for new home developments.

 

While it’s critical that we work in unison to protect public health during this pandemic, we must do all that we can to avoid exacerbating the housing and shelter shortfall already facing Southern California residents. As housing construction continues, the implementation and enforcement of health and safety workplace protocols must be first and foremost, including strict social distancing requirements at all worksites.

 

The homebuilding industry is grateful for the leadership of our elected officials during these challenging times. We will continue to do our part to protect the health of our residents and support our economy.