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Building Permits Show Decline in Housing Unit Production

November 22, 1987

California housing production, as measured by new units in building permits, continued to sag in September as permits declined by 9.6% from August, according to Roger C. Werbel, California Building Industry Assn. president.

In September, housing units were produced at an annual rate of 212,300, down from August's 234,800 annual rate. September's building permit action dropped 29.9% in comparison to boom year 1986's total of 302,800 annual permits.

Werbel, a Monterey Park-based home builder, noted that a majority of September's production decline was in the multitenant sector. Multifamily dropped 15.8% (85,500 annual units) in September compared to August's 101,500. Comparing this September's multifamily permits with September 1986's 152,600 annual rate, the drop off was 44%.

The CBIA president said that multifamily finally reached its predicted slump during August and September, following the passage of the Tax Reform Act of 1986.

"Research Board figures, however, provide a bright spot for the industry," Werbel added. "They show that single-family housing totaled 107,479 units (not seasonally adjusted or annualized) in the first nine months of this year. That's up 1% from the same period last year, which was a tremendous year for California housing production."

Overall, he said, the state's construction volume totaled $29.4 billion in the first nine months. Not adjusted for inflation, that means an increase of 2.4% from the same time period in 1986.

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