Are Housing Production Laws Causing An Increase in Multifamily Permits?
- William Fulton
- Nov 29, 2021
- 3 min read
If you read CP&DR on a regular basis, you know that we’ve been trying to cover individual situations where developers are using the state’s new housing production laws to push through projects that might previously been denied by local officials. Like the clever L.A. developer who got an affordable housing project in Marin County approved using SB 35 and AB 1763. Or the developer that forced Los Altos to fold its opposition to a five-story downtown building. Or the so-far-successful legal challenge to Huntington Beach’s denial of a 48-unit condo building just off Beach Boulevard.
So the anecdotal evidence is coming in. But does that mean more housing is being built – in particular, more multifamily housing, which is the main target of the housing production laws?
CP&DR’s analysis of the Census Bureau’s survey of building permits suggests that it is making a difference, albeit a small one. New housing has been stuck in the range of 100,000 to 110,000 per year for the last several years and actually declined in Gov. Gavin Newsom’s first year in office. But the trend line for 2021 suggests that new housing could hit 120,000 this year, which would be the most since 2006. That’s a long way from the 200,000+ that experts say the state needs in order to catch up to the deficit created over the past 30 years, but it’s a start.
Yes, single-family permits are up about 10%. But units in apartment projects (5+ units according to the Census) are up 20%. And new apartment projects are up 35%. It’s impossible to determine from these statistics whether the new laws are playing a role, but the jump in apartment buildings suggests that something is going on.
In both 2020 and 2021, single-family units account for about 57% of all new housing. That’s a long-term trend, as both single-family stock and home ownership rates have been in the high 50s for a long time. At the same time, construction of “plexes” – duplexes, triplexes, and fourplexes – has been bumping along at about 3% of total production. (We’ll see if that changes with the passage of SB 9.)
But the real action is with the apartment projects – the housing type that developers are advancing most frequently using SB 35 and other new state laws.
There a lot of ways one could slice the numbers, but the bottom line is this: Something changed in the Fall of 2020. The number of multifamily projects and multifamily units being permitted went up significantly – and has stayed up.
