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Permit Rate Drops After December Rise

March 15, 1987

California's seasonally adjusted annual building permit rate fell to 274,100 units in January, down 50.2% from December's record pace of 549,800, according to Ben Bartolotto of the Construction Industry Research Board.

The December rate--up more than 80% from November--was abnormally swelled by builders rushing to obtain permits before a $1.50-per-square-foot school classroom construction fee on residential construction became law Jan. 1, he said.

Bartolotto added that the surge in permit activity has resulted in a downward adjustment to the board's 1987 housing forecast, from about 311,189 units in 1986 to 247,000 in 1987, a nearly 21% decline. The school fee applies to new construction and habitable additions to existing houses. The law provides for a charge of up to 25 cents per square foot for commercial construction.

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