Home Building Lags Jobs Created Across Southland

Los Angeles County leads the nation in demand for housing and, with just one new home being built for every six new jobs added in the area, competition for shelter is likely to grow, according to a new study.

Orange County and the three other major Southland markets also finished high on the housing-demand list in a quarterly report compiled by the Meyers Group, an Irvine-based housing research firm.

The study, released Wednesday, portends rapidly escalating home prices and higher costs as well for those who rent.

“We’ve got high demand for housing and we’re not providing it,” said John Burns, a Meyers Group senior managing director, who conducted the study.

The report compared 110 metropolitan areas nationwide by job creation and the number of new housing permits issued over a 12-month period ended in March.

Los Angeles County finished first, with demand running more than three times higher than the rest of the nation. Once Los Angeles regains all of the jobs it lost during the early 1990s--projected to occur next year--the county’s home prices will escalate by 10% or more a year, Burns said.

Demand for housing in Orange County was more than twice the national average, with more than four new jobs created for every new-home permit issued. Ventura County was ranked 17th; San Diego 24th; and Riverside-San Bernardino 32nd.

The study found that builders across the country have fallen behind the demand for new homes indicated by job creation in the longest peacetime expansion in history. Housing demand overall is outpacing supply by 40%.

“It’s a sad story for the consumer,” said Ken Agid, marketing director for the Playa Vista master-planned community in Marina del Rey. He estimated that prices would escalate by 1% a month over the next 18 to 24 months.

The inability to meet the demand for housing is also likely to drive up apartment rents, which already are at record levels, and make it even more difficult for employers to attract and retain workers, forcing more employees to make longer commutes.

There’s little that can be done to improve the housing supply in Los Angeles County, according to Burns, because there is little vacant land available except in outlying areas, such as the Antelope Valley and Santa Clarita.

It’s the same story in Orange County, where little available open land exists outside of Irvine Ranch, which is controlled by the Irvine Co.

Although several master-planned communities will be opening this year in Orange County, that will improve the housing supply only slightly relative to demand, said Dave Chapman, a housing analyst at Haskell & White, a Newport Beach accounting firm.

“It doesn’t come close to solving the overall housing shortage,” he said.

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Hot Markets

Los Angeles County had the highest demand for housing in the nation in the 12 months ended in March, while Orange County ranked fifth. The demand index is achieved by dividing job growth by the number of building permits issued.

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Market Job growth Permits Demand index Los Angeles/Long Beach 77,300 12,224 6.32 New York 90,400 14,896 6.07 San Francisco 28,800 5,371 5.36 Bergen/Passaic, N.J. 13,200 2,516 5.25 Orange County 48,100 10,901 4.41 Newark, N.J. 21,000 4,882 4.30 Nassau/Suffolk, N.Y. 25,500 6,018 4.24 Binghamton, N.Y. 1,100 272 4.04 Boston 30,200 7,725 3.91 Syracuse, N.Y. 4,900 1,431 3.42

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Source: Meyers Group