The housing bust has cost California plenty.
The industry's economic output has plunged by about 80% since 2005, representing a loss of tens of billions of dollars and hundreds of thousands of jobs, according to a report released Monday by the California Homebuilding Foundation and the Center for Strategic Economic Research.
The study found that new housing construction contributed $13.8 billion to the California economy in 2009, down from $67.7 billion in 2005. Employment plummeted to 77,000 last year from 487,000 jobs in 2005 — a drop of 84%.
To gauge the industry's effect on the state's economy, the study looked at jobs and economic activity created by suppliers, as well as retail spending by construction workers and related employees.
New housing construction is a key sector of the state's economy, accounting for about 0.4% of California's output and ranking among the top 15% of all industries. The larger housing industry, including remodeling, repair, brokerage, property management and financing, accounts for about 11% of all economic activity in California, according to the report. That translates into about $350 billion of output and about 1 million jobs.
Residential construction permits declined nearly 83% between 2005 and 2009. That drop has rippled throughout the California economy, affecting businesses including insurance carriers, furniture retailers, auto repair shops and cable and satellite TV companies.
"The downturn in building activity has also generated a considerable decline in all of the sectors that supply goods and services to the construction industry as well as those that benefit from workers spending their wages," said Ryan Sharp, director of the Center for Strategic Economic Research.