Few industries have been as hard hit by the recession as home building, and our county has been no exception.

Consider: Countywide, we are on track in 2011 to have the lowest number of new homes under construction since at least 1990. During the first six months of the year, only 132 building permits for single- and multifamily homes were pulled. For the same period last year, there were 302.

In some communities, residential growth is practically at a standstill.

In Grover Beach, there wasn’t a single residential building permit issued in the first half of this year. In Arroyo Grande, there were only four permits issued and in Paso Robles — which had been one of the fastest-growing communities in the county — there were eight.

We know there are some no-growthers who will see that as cause for celebration.

We don’t.

Here’s why: While housing prices have fallen sharply, the county still lacks a decent supply of workforce housing.

To put it bluntly, we have enough McMansions. We don’t have an overabundance of smaller homes that are affordable to young professionals and couples starting their families, as well as to retirees, who may be looking to downsize.

The city of San Luis Obispo, in particular, has an imbalance between jobs and housing — as anyone stuck in commuter traffic at 5 p.m. can attest.

We saw it as good news, then, when plans for the 177-unit Serra Meadows project in San Luis Obispo’s Margarita area were unveiled last week.

In the short term, this will bring much-needed construction jobs — as many as 500 — during the three-year construction phase. And while one project does not constitute a recovery, if this development is successful, it could be the start of a turnaround.

But beyond the immediate benefits, will this project make sense 10 or 20 years from now? We believe so.

We recognize that the term “smart growth” has been so overused that it has lost almost all meaning. After all, would anyone admit to building a “dumb growth” project? But this development does seem to merit the smart growth description, for these reasons:

• The housing sizes are reasonable. It will include some modestly sized units of 1,500 square feet. Even the largest units — 2,600 square feet — are less than behemoth. That would have been practically unheard of a decade ago, when the credo was bigger is better.

• The units are designed to reflect how people actually live. They won’t, for example, include those formal living rooms that are rarely used.

• Work/live units will be included in the project, with office or retail space on the ground floors and living units above. Those will be located near existing businesses on Prado Road, to create a transition between commercial and residential areas.

• The project will be built near existing infrastructure — roads, businesses, public transportation — and will not be the “leapfrog” development that’s led to so much urban sprawl.

To be clear, this will not qualify as an affordable housing development, though there will be a separate affordable housing component of 22-45 homes.

Starting prices for the MD2 project are expected to compare to what similar-sized resale homes are going for in San Luis Obispo. That’s in the $420,000 to $480,000 range, though that could change by the time the first units are completed in April.

We look forward to seeing the results.

With a little luck, the project will help us turn the corner — away from the oversized, expensive, gadget-packed manses of the past couple of decades to the smaller, more affordable homes that once dominated American neighborhoods.