San Diego County communities approved slightly fewer homes last year despite increasing political pressure for more housing in California.

Cities and the county issued 4 percent fewer residential building permits in 2017 than the previous year, said the Real Estate Research Council of Southern California in a report released this week.

Overall building was down because of a reduction in apartment and condo construction, despite an increase in single-family home construction. The year started out with a major reduction in home building, but made up for it with an extremely busy fourth quarter.

Building permits for 9,580 new housing units were pulled in 2017. That’s down from 9,972 in 2016 and 9,975 in 2015. It’s up from a low during the Great Recession, when fewer than 3,000 homes were built in 2009.

The report comes as lawmakers seek new ways to get more homes built as a way to reduce housing costs. Two of the state’s leading candidates for governor, Lt. Gov. Gavin Newsom and former Los Angeles Mayor Antonio Villaraigosa, have said they want developers to build a half million homes a year for the next seven years, according to the Los Angeles Times.

Most of Southern California saw increased building permits in 2017, up 7 percent among the seven counties, compared to 2016. Only San Diego and Orange counties saw less demand.

Borre Winckel, CEO of the local Building Industry Association, said it was good San Diego County was down just 4 percent from the year before — he had predicted a bigger dip — but it didn’t make the news much better.

“We are still operating at very modest volumes,” he said. “Nowhere near what we need for housing people.”

Read the rest HERE.

Modern cities are ruled by cars. Streets are designed for them; bikers, pedestrians, vendors, hangers-out, and all other forms of human life are pushed to the perimeter in narrow lanes or sidewalks. Truly shared spaces are confined to parks and the occasional plaza. This is such a fundamental reality of cities that we barely notice it any more.

Some folks, however, still cling to the old idea that cities are for people, that more common space should be devoted to living in the city rather than getting through it or around it.

But once you’ve got a city that’s mostly composed of street grids, devoted to moving cars around, how do you take it back? How can cities be reclaimed for people?

The city of Barcelona has come up with one incredibly clever solution to that problem.

It’s a bird … it’s a plane … it’s SUPERBLOCK

As anyone who has visited knows, Barcelona is absolutely dreamy — one of the most pleasant, walkable cities on Earth, filled with markets, sidewalk cafes, and bustling street life.

But it too has become clogged by cars and choked by air pollution over the past few decades. So in 2014 it developed an Urban Mobility Plan, designed to give the city back to people (and reduce pollution).

In America, we can’t even agree on the idea that cities are for people. We still decry bike lanes as a “war on cars,” even in our allegedly progressive West Coast cities. So from where I’m sitting, the Barcelona plan is pretty fantastic: 186 miles of new bike lanes, a revamped bus system with better access and more frequency, more green space, and on and on.

But the coolest idea in it is “superblocks” (superilles in Catalan), a concept developed by Salvador Rueda, director of the Urban Ecology Agency of Barcelona. (Cities of the Future has a great interview with Rueda and a history of the superblocks concept — highly recommended. The Guardian also has nice piece.)

The idea is pretty simple. Take nine square blocks of city. (It doesn’t have to be nine, but that’s the ideal.) Rather than all traffic being permitted on all the streets between and among those blocks, cordon off a perimeter and keep through traffic, freight, and city buses on that.

In the interior, allow only local vehicles, traveling at very low speeds, under 10 mph. And make all the interior streets one-way loops (see the arrows on the green streets below), so none of them serve through streets.

Read the rest HERE.

It’s hard to believe, but the new year is almost upon us. If you’re looking at making changes to the place you live, you might want to take stock of what the experts are seeing and predicting. There could be good ideas for you to consider for your own redesign, new home purchase or remodel. Here are five pros weighing in on some of the major trends happening now: Vanessa Linn, vice president with national builder Shea Homes, which has 13 new communities in construction in San Diego County; Niko Zavala, store manager at Lowe’s San Diego location; Clay Leaf, a La Jolla-based building contractor and 2017 president of the National Association of the Remodeling Industry’s San Diego chapter; Chrysanthe Broikos, curator at the National Building Museum in Washington, D.C.; Alex Capecelatro, co-founder and CEO of Josh.ai, a home technology company specializing in high-end voice control systems.

Social trends

It all starts with people, including the people who live in your home today, the people who might be joining your household, (perhaps a new baby or older relative), and the people who visit regularly.

“Unprecedented shifts in both demographics and lifestyle have fundamentally transformed how we are living,” observes curator Broikos. The National Building Museum is showcasing these shifts in its current “Making Room: Housing for a Changing America” exhibition. “While only 20 percent of our households are nuclear families, (down from 40 percent in 1970), the housing market largely remains fixated on their needs,” she comments. Many households today are extended family, older singles or home shares.

Shea is one of the national home builders addressing social shifts like these. “A major factor in our layout is the impact of multigenerational families; either with adult children returning or aging relatives needing care. At a variety of our communities, we offer two options: either an additional master bedroom or a multigenerational suite with living space. We expect this to be an accelerating need in San Diego.” The region’s multicultural dynamics likely contribute to this as well, with many households having family visit from other countries for extended periods.

This is true for home renovation, too, Leaf notes. Aging-in-place projects (designed to provide safety, accessibility and comfort for older residents so they can remain at home), are happening regularly, the contractor says. “As a region with an aging population, I expect more kitchen modification for aging in place.” Bathrooms often get those enhancements first.

Interior remodels and room additions were the most requested projects in our area this year, Leaf observed from local NARI activity, and “with a short supply of new homes in San Diego, we expect this trend to continue.”

Read the rest HERE.

SAN FRANCISCO — The skyscraper came late to this city, a shipping and manufacturing hub for much of its existence. The wealthy roosted on the hills and the masses toiled on the flats and the docks. Everyone lived close to the ground in a setting renowned for its natural beauty.

Now the things being shipped are virtual, and vast amounts of office space are needed to design, build and market them. Salesforce, a company that did not exist 20 years ago, will take up residence on Jan. 8 in the new Salesforce Tower, which at 1,070 feet is the tallest office building west of the Mississippi.

In Silicon Valley, the office parks blend into the landscape. They might have made their workers exceedingly rich, they might have changed the world — whether for better or worse is currently up for debate — but there is nothing about them that says: We are a big deal.

California homeowners and regulators have a new fear about wildfires ravaging the state: that insurers will drop coverage.

Massive, out-of-season fires in northern and southern California are causing billions of dollars in claims and challenging expectations of when and where to expect blazes. State law gives insurers more leeway to drop coverage than to raise rates, and some are taking the opportunity, concerning California Insurance Commissioner Dave Jones.

Homes in the Sierra Nevada foothills were dropped after wildfires swept through the region in recent years, and some other Northern California homes also have been cut from rosters, Jones said.

“We may see more of it,” he added in an interview. Insurers must renew fire victims’ policies once, but after that homeowners could be driven to unusual, expensive policies.

Retired firefighter Dan Nichols of Oroville, California was surprised when Liberty Mutual dropped his coverage this year, following a wildfire in the region.

“I was shocked and angry,” said Nichols, 70, by email.

Liberty Mutual must “responsibly manage” its overall exposure to California’s wildfires as part of a strategy to safeguard its ability to pay homeowners’ claims, a spokesman said. The insurer still issues policies in California and its strategy is not in response to recent fires, he said.

Nichols found a better deal through AAA, but others are not as lucky. In San Andreas, a community northeast of San Francisco, homeowners typically use specialty insurers, known as “surplus lines carriers,” for policies that cost about 20 to 40 percent more than a mainstream insurer, said Fred Gerard, who owns an insurance agency in the area.

Insurers must be cautious by not covering too many homes in one area, said Janet Ruiz, a spokeswoman for the industry’s Insurance Information Institute. “They tend to spread their risk so they can pay claims,” Ruiz said.

Read the rest HERE.

The profits made from flipping homes continues to shrink from CNBC.

• Single-family homes and condos flipped in the third quarter of this year brought an average gross profit of $66,448 per flip.
• Home flipping profits continue to be squeezed by a dwindling inventory of distressed properties available to purchase at a discount.
• Despite lower returns, home flipping is still a popular business.

Even as more investors are flipping homes, they’re seeing less profits in return.

High home prices, increasing renovation costs and a skimpier supply of distressed properties are making it more expensive to get in the game, even though demand for move-in ready homes is high.

Single-family homes and condos flipped in the third quarter of this year brought an average gross profit of $66,448 per flip, representing a 47.7 percent return on investment for flippers, according to Attom Data Solutions, a real estate data and analytics company. Attom defines a flip as a home bought and sold in a 12-month period.

That return is down from 48.7 percent in the second quarter and from 51.2 percent in the third quarter of last year. It is the lowest average gross flipping return on investment since the middle of 2015.

“Home flipping profits continue to be squeezed by a dwindling inventory of distressed properties available to purchase at a discount and increasing competition from fair-weather home flippers often willing to operate on thinner margins,” said Daren Blomquist, senior vice president at Attom Data Solutions.

Despite lower returns, home flipping is still a popular business. Close to 49,000 homes were flipped nationwide in the third quarter, unchanged from a year ago. One big shift, however, is that there are more investors flipping, and they’re each flipping fewer homes. The ratio of flips per investor, just 1.25, is the lowest since 2008.

Read the rest HERE.

Robert Shiller on GOP tax plan and home prices from CNBC.

The co-creator of the much-watched S&P/Case-Shiller home price index doesn’t think the mortgage interest deduction really matters to the housing market.

“It’s not big,” said Yale economics professor and Nobel laureate Robert Shiller.

He also doesn’t think home prices will fall if the cap on the amount of mortgage debt (currently $1 million of debt) one can deduct interest payments on is cut in half. About 2.9 million borrowers have mortgages with an outstanding balance higher than $500,000, according to Black Knight.

“The general idea is it would push prices down if people are rational,” which Shiller says they are not when it comes to housing. He is the author of the bestselling book “Irrational Exuberance.”

He does, however, think that if homeowners can no longer deduct their property taxes, or if the amount they can deduct is limited under the new tax plan, that would be a big deal — at least to rich people.

“That is going to be a substantial hit to people who are paying a lot of property taxes, and it might be a consideration that you make before you buy a big mansion in some high property tax state,” said Shiller.

While economists, housing advocates and housing industry lobbyists argue the effects of the Republican tax plan and worry about the possibility of higher interest rates, Shiller, who has studied the economics of housing dating back to the 1800s, sees very little rhyme or reason to any of it. The human factor — the emotional aspect of most people’s single largest investment, a home — is far greater than the market stimuli that are accorded such importance.

“I tend to think it’s not as great as you imagine because people are people, and I don’t find that historically home prices have relied at all predictably to changes in things like interest rates,” said Shiller, pointing to the huge boom in housing in the last decade. Interest rates didn’t move at all during that time.

Read the rest HERE.

San Diego County is on track to build fewer homes than it did last year, said permit records released this week.

Residential building permits for all homes — condos, apartments and single-family homes — are down 18 percent in the first nine months of 2017 compared to the same time last year, said the Real Estate Research Council of Southern California.

The only county with slower building was Orange County, which had a 21 percent reduction. All other Southern California counties had an increase in building in the first three quarters.

The findings come at a time when local and state politicians are adopting policies aimed at increasing residential construction as a way to slow rising prices or limit commute times for environmental reasons. A San Diego Housing Commission report in September, produced along with two city councilmen, said the city needed to triple its yearly housing production.

San Diego County had 6,054 permits issued, down from 7,412 permits from the same time in 2016. The county had produced roughly 10,000 units by the end of 2015 and 2016. To reach that number, the county would have to build nearly 4,000 homes in the last quarter of the year.

The slowdown is led by a drop in permits for multifamily construction, down by 2,209 permits, or 40 percent, compared to the same time last year.

Real estate analyst Russ Valone, president of MarketPointe Realty Advisors, said fewer new builders are coming to town because of land costs. He also noted that some lenders are wary of new projects because rent increases for high-end apartments has slowed.

“As those newer projects’ rents push into the mid-$2,000 a month range, we started to see a slowdown in the rate of increases,” he said. “I think you may have some lenders looking at the slowed increases and starting to take a cautious view of the marketplace.”

However, he said many of the large apartment and condo projects being built right now had permits pulled at the end of 2016, so its possible the data isn’t as significant. The county has been building more apartments than traditional homes since the end of the Great Recession.

But one increase so far this year? Single-family homes are up, producing 851 more homes than the same time last year.

Read the rest HERE.