Letters to the Editor

Viewpoint: Building woes reflect economy

On the Central Coast and across the state, the home-building industry has been hammered by the recession, unfortunately nailing down the economy with us.

For those working in home building, 2009 was the worst on record, making the recession feel more like a depression.

The economic output and employment in the construction industry have fallen 80 percent since the housing boom peaked five years ago. As a result, our economy has lost hundreds of millions of dollars and thousands of jobs locally.

In San Luis Obispo County, the total economic output from new home construction and related employment fell 23.5 percent from 2008 to 2009. That cost the economy $47.5 million and 300 jobs in just one year. The overall fall is even steeper. The 372 new residential building permits in 2009 plummeted 73 percent from the annual average of 1,382 and dropped 84 percent from the peak of 2,263 permits.

While we suspect that some segments of the community lack any sympathy for the building industry, we also believe that our problems deeply concern your neighbors, friends and family who have lost jobs, businesses and homes during the worst economic slump since the Great Depression 80 years ago.

The home-building industry provides the shelter for your family and stimulates the economy. Every new single-family home produces 3.24 jobs and supports another 1.2 jobs, and each dollar spent building a home produces another 80 cents in total economic activity. At the peak in 2005, the 205,000 new homes permitted statewide accounted for $67.7 billion in economic output and 487,000 jobs, amounting to 3 percent of the total state economy. That fell to 0.4 percent in 2009, when only 35,000 new homes were permitted statewide.

Even at the peak, the number of new homes built statewide fell below the 220,000 that the state Department of Housing and Community Development says are needed annually to meet normal population growth.

Population growth hasn’t stopped just because home building has. New home building doesn’t cause growth. It is a reaction to the growth that occurs every time a baby is born. Children grow up, get married and form a new household, businesses add a job or someone moves here to retire or to fill the role of a local retiree in the economy.

We are enduring a recession that seems to be lingering regardless of how many economists tell us that things have bottomed out or are getting better. As long as unemployment remains high, the economy remains low, particularly if you can’t find work or can’t stop worrying that your job is endangered.

Historically speaking, past recessions ended when home building restarted. When that happens again, it will mean that the people are spending money, are confident that their jobs are safe or are thrilled that they now have work.

We hope that happens soon. Perhaps you should too. Without a home-building industry, there are and will be fewer jobs and no place to go home to after work.

Jerry Bunin is the government affairs director for the Home Builders Association, a nonprofit trade association representing about 120 construction-related businesses in San Luis Obispo County and Santa Barbara County.

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