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California On Pace To Permit Under 100K Homes This Year; Worst Since Recession

SACRAMENTO (CBS SF) – Despite strong demand for homes amid the state's housing crisis, new figures show the number of residential building permits issued this year is on pace to be the lowest since the Great Recession.

According to the nonpartisan California Legislative Analyst's Office, only 8,640 permits were issued in July, down 10 percent from July of 2018. In the first seven months of 2019, 61,200 permits were issued, down 17 percent from the previous year.

"The recent slowdown in housing permits is the most severe since the Great Recession," the analyst's office noted, saying there have been only two times since the 1990s that have had permitting declines as significant as the decline over the past year.

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The analyst warned that the state is on pace to permit fewer than 100,000 homes in 2019. State officials say at least 180,000 new homes need to be built every year (.pdf) to meet projected population and household growth.

Meanwhile, Gov. Gavin Newsom had campaigned on a goal to build 3.5 million housing units by 2025, which would average out to about 500,000 units per year.

The figures echo a recent analysis from the Public Policy Institute of California which found the number of building permits has dropped significantly in several Bay Area counties. Between July 2018 and June of this year, the number of permits issued in San Mateo County was down 49 percent, while in Alameda County it was down 30 percent. Santa Clara and Contra Costa counties also saw declines in residential building permits.

Meanwhile, permits were up significantly in San Francisco and in Sonoma County, which is in the midst of rebuilding following the 2017 wildfires.

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