Around Sonoma County, long-awaited housing projects finally get off the ground
Across the street from Rohnert Park’s Green Music Center, construction workers are transforming a wide tract of land into the largest homebuilding site for Sonoma County in years.
In the coming months, three separate housing companies are slated to construct a total of 175 single-family homes on what was once farmland off Rohnert Park Expressway. The three projects, the first to be built in the city in 15 years, comprise the start of a new University District neighborhood that one day could hold more than 1,600 housing units.
“It’s been a long, long time in Sonoma County since we’ve seen something like that,” said Randy Waller, broker/owner of W Real Estate in Santa Rosa.
The three University District projects are the largest among a score of developments poised to get underway in the county this year.
The number of new homes built likely will remain a fraction of what was annually constructed in the decades before a national housing crash. But after eight years of paltry results, builders and officials expect a jump in activity that is pushed by both strong demand and higher prices.
“We’re playing catchup,” said Keith Woods, chief executive officer at North Coast Builders Exchange, a Santa Rosa trade group. The activity won’t amount to a full rebound, he said, but “there is a really strong bounce-back underway.”
For decades, Sonoma County relied on homebuilding as a major engine of economic growth, one that employed thousands of construction workers and directly benefited home furnishing, appliance and landscaping companies.
But home construction tumbled sharply in the aftermath of a global financial crisis that was sparked by risky U.S. residential lending.
For a period of 20 years ending in 2007, county home builders on average constructed 2,500 houses, condominiums and apartments per year. Since then, the yearly average has plummeted to 580 units.
In the last five years, construction jobs have increased and the economy has expanded in the county. But residential building has remained slow to rebound.
Even last year, city and county officials issued building permits for just 236 new single-family homes, the lowest number in at least 45 years, according to the California Homebuilding Foundation.
For Rohnert Park, the dry spell began long before the housing crash, a reason city officials are looking with anticipation to the new subdivisions in the University District.
“These are the first single-family homes in Rohnert Park since the M Section in the early 2000s,” said Mary Grace Pawson, the city engineer and director of development services. The M Section neighborhood sits near the southern edge of the city.
The lack of construction has significantly limited the choices of home buyers seeking to buy either new or existing homes.
“The inventory situation in Sonoma County is one of the most dire in the Bay Area,” said Taylor Cohee, director of sales and marketing for Walnut Creek-based Ryder Homes homebuilders.
Ryder, which has built 1,000 homes in the county over the last two decades, will start work this summer on 21 single-family homes in east Petaluma with prices starting in the mid-$700,000s. The mobile sales unit for the Avila Ranch development likely won’t get set up on site until mid-August, but already 24 potential buyers have been pre-approved by the project’s lender.
“It’s definitely hit a nerve out there,” Cohee said of the project.
Similarly, more than 200 people have signed up early on an interest list for the 55-unit Aria Place project in northwest Santa Rosa, said Waller, whose W Real Estate is handling sales there. The project’s grand opening won’t take place until July, he said, with the single-family homes there starting at $475,000.
What held home building back after the housing crash was depressed home prices more than a lack of demand.
“The economics were not there,” said Waller. Buyers could purchase foreclosed homes and other properties for less than what it would cost builders to construct a new house.
But home prices have risen significantly in the last seven years. The county’s median single-family home prices hit a low of $305,000 in February 2009. But April ended with the median price at $569,500, just 9 percent below the record high of $619,000 set in August 2005.
Waller, who tracks new home projects, has counted more than 40 planned developments in the county that one day could accommodate over 5,000 units for single-family homes and condos. That includes more than 800 units for which builders theoretically could pull permits this year.
The actual number likely will be considerably less because “development projects are always, always, always behind” schedule, he said. But the level of preparation by developers leads him to believe an increase in activity is on the horizon.