Construction Law Is All We Do
Call now: 714-401-4016
We are good at what we do, because
Construction Law is All We Do
Construction-Specific Business Formation and Transactional Services
Defect and Work Performance Disputes
Mediation and Dispute Resolution Services
Contract Bidding, Negotiation and Preparation for Private and Public Projects

New home construction has risen, but still has a way to go

It’s a virtual certainty that any California resident who entertains friends or family hailing from other parts of the nation will hear them comment on two things during their visit: the weather and home prices.

While it’s understandably a bit taxing to revisit these points again and again, the Golden State does indeed have some of the highest home prices and rents in the nation. It’s important to understand, however, that this reality isn’t solely attributable to the fact that “it’s a desirable place to live,” but rather to construction.

Specifically, academicians, economists and lawmakers alike have all indicated in very clear terms that the state’s high home costs and rents have been driven in large part by the dearth of new housing construction over the last several decades.

In fact, recent figures indicate that if California housing costs are to be kept reasonable, the rate of new construction must keep pace with the average household size, which would mean one new home per three people.  

While developers fell far short of this mark in the post-recession years — building just one new home per 9.67 people in 2011 — recent numbers show that housing construction is actually on the rise.

According to data released by the Department of Finance last week, the number of houses in the state increased by 88,562 units in 2016, which translates into a rate of one new home for every 3.78 residents.

The numbers were even better in Los Angeles and Orange counties, both of which outperformed the entire state. Indeed, Los Angeles County built one new home for every 2.52 residents and Orange County one new home for every 2.79 residents.

Experts indicate that the state has a long way to go, however, with developers needing to add roughly 23,400 more homes than last year to keep pace with average household size.  

As encouraging as it is that builders are likely going to be incredibly busy for the foreseeable future, it’s important for them to realize that with this steady stream of projects comes a greater likelihood of legal disputes.

Given this reality, it’s also important for them to consider consulting with a skilled legal professional familiar with the complexities of the construction industry and experienced in handling these disputes.