The nine-county Bay Area region experienced an even sharper decrease in home-building last year, with a 26% downturn in total residential permits issued. The region issued 28% fewer multi-family permits, and 24% fewer single-family ones.
The Bay Area’s slowdown on housing production — particularly of multi-family units, which can house more people in denser urban areas — has led to a red-hot market, with fierce competition over the small pool of available homes. Prices have skyrocketed in Napa County and Alameda counties in particular: The two counties saw their median home values increase by more than 10% in just the past year, according to data from the real estate firm Zillow.
Marin County had the greatest decrease in residential permits overall, with 54% fewer permits issued in 2020 compared to 2019. Most of that decrease came from multi-family housing — the county issued just three multi-family permits in 2020, compared to 86 in 2019. Four other counties, Alameda, San Mateo, Sonoma and San Francisco, saw housing permits decrease by more than 25%.
The only Bay Area county that saw increased housing production last year was Solano. The county, which had looser restrictions on construction last April than most other Bay Area counties, issued 41% more housing permits in 2020 than it did in 2019. Solano particularly increased its multi-family housing production: The county issued 716 multi-family permits in 2020, over ten times more than the 56 it issued in 2019.
California hasn’t built enough homes to keep up with its population since the 1970s, but the state has suffered from an especially steep decrease in production during the Great Recession. Statewide residential permits fell by 83% over four years, going from 209,000 permits in 2005 to just 36,000 in 2009.
Starting in 2010, housing production climbed steadily back upward until 2018, when permits peaked at 118,000. Then they fell back down to 111,000 in 2019, a 6% decrease. And then they fell again last year, down to 100,600 — the lowest number since 2015 and far from Gov. Gavin Newsom’s stated goal of about 500,000 new homes a year.
Matt Lewis, director of communications at California Yimby, a pro-housing advocacy organization, said that the pandemic contributed to declining housing production last year in several ways. For one, ongoing supply shortages have driven up the cost of lumber, along with other building materials, like iron and steel.
Additionally, some parts of the state temporarily halted or impeded construction last year, he said — including the Bay Area, where most counties shut down a majority of construction sites last April.
“A month of a job site sitting dormant is a loss of money depending on the size of the job site, (and) has the impact of scaring off some of the capital that might come from future projects,” Lewis said.
Government building shutdowns also caused delays to many projects by slowing down the collaborative process between developers and city officials, as the Mercury News previously reported.
Susie Neilson is a San Francisco Chronicle staff writer. Email: firstname.lastname@example.org Twitter: @susieneilson