December 10, 2007

Corona Chamber Seeks Answers to the Housing Market Collapse

The housing industry is a major economic engine for Corona and the region. As the housing market has slowed, businesses are beginning to suffer losses and the pain is spreading to local, state and federal government budgets. As the Riverside Press Enterprise headline states, “Belt-tightening over slower growth awaits area governments.”

Last month, I met with the Riverside County Chapter of the Building Industry Association of Southern California (Riverside BIA) to discuss potential partnerships between the Riverside BIA and the Corona Chamber to educate elected officials on the need to streamline Riverside County’s building permit process.

It is no secret that housing production has declined by more than 50% in the last year. According to the Construction Industry Research Board, construction has declined from almost 29,994 homes in 2005 to 20,692 in 2006 to a projected 9,926 homes this year.

On average, every new home represents approximately $50,000 in homebuyer/developer fees. Since 2005, revenues have declined from $1.5 billion to $496 million (a loss of more than $1 billion).

Land values have collapsed, which will erode property tax revenues and directly impact transportation, public safety, parks and recreation and other important government services.

The current Corona Chamber-supported plan is to develop a coalition with the Riverside BIA to educate elected officials, participate in the public debate and identify and recruit additional coalition partners that will help gain momentum, diversity and achieve success.

We will find success in ensuring from the County of Riverside that they take seriously the need to not only streamline the prolonged entitlement and permitting processes but to understand that now is not the time to increase homebuyer/developer fees.