HOME BUILDERS IN CALIFORNIA CAN EXPECT another banner year, but they'll still fall short of meeting housing need in the state, according to the California Building Industry Association. The CBIA's 2005 housing forecast predicts nearly 210,000 housing starts, mirroring production numbers for 2004. But despite the fact that last year was the first year since 1989 in which construction began on more than 200,000 new homes and apartments, continued strong demand will create a shortfall of new housing, according to the report.

“Impressive as these numbers are, it should be remembered that California's home builders are still not meeting the state's housing need,” says Alan Nevin, CBIA chief economist and author of the report. “Nearly 250,000 homes and apartments are needed each year to accommodate the state's growing population.”

Related to that shortfall, Nevin expects prices to increase 4 to 5 percent on the average statewide, exacerbating the state's affordability crisis. In a recently revised report, the NAHB/Wells Fargo Opportunity Index shows that California is now home to the 11 least-affordable housing markets in the country. Urging legislators to enact reforms to allow housing production to meet demand, Robert Rivinius, CEO of the CBIA, referred to the index as a “fresh reminder of how serious this crisis is.”