Permitting Up 21% in California

May 27, 2009

Pulling the necessary building permits isn't the same as actually putting a shovel into the ground, but it's the next best thing, and California builders appear ready to start digging again. According the Construction Industry Research Board, 2,265 single-family permits were pulled throughout the state in April. That's down 33% from April a year ago, but it's up 21% from March. It also was the largest monthly total since October, when Golden State builders pulled 2,352 permits, and Robert Rivinius, president of the California Building Industry Association, says the gain is strong evidence that the $10,000 state income tax credit put into place in March is working to help clear out the old and start the new. The credit, combined with the $8,000 federal tax credit for first-time buyers, is "having the desired effect of stimulating home sales and clearing out inventory, which is helping to generate new construction and put people back to work," Rivinius said. But, with two-thirds of the $100 million set aside for the state credit already called for in the initial 12 weeks, builders now are pushing lawmakers in Sacramento to earmark $200 million more for the program to keep the momentum going. At the current rate, the research group says permits for just 40,000 units will be pulled at local zoning offices this year. That would be the lowest on record. How low? Down 38% from the record-low 64,962 units produced in 2008.