It’s all about the homes – North Bay Business Journal

The outlook for the North Bay construction industry in 2020 is bright, but experts expect the surge in projects to shift from disaster recovery to economic rebuild.

I think were going to see parallel tracks of housing activity in 2020, said Keith Woods, CEO of North Coast Builders Exchange, a trade group for over 1,200 construction companies and related professionals in Sonoma, Napa, Mendocino and Lake counties.

One of those tracks of homebuilding work will be continued rebuilding of homes that were destroyed in the 2017 wildfires, and the other track is for building housing that was needed before the fires, he said.

Of the 3,043 housing units destroyed in Santa Rosa, mostly by the Tubbs Fire, 2,266 units are in the rebuild process (seeking or received permits), with 892 completed so far, according to the citys online progress tracker as of Dec. 23. Under construction are 1,132 units, and another 242 have permits or have applications pending.

Of 1,949 parcels in unincorporated Sonoma County with fire-damaged structures, nearly a quarter have rebuilding construction complete, 61% are in construction, and permits for another nearly 15% are in review or issued.

In Napa County, permits have been issued on 129 units and are pending for 55, according to that tally.

Some of the continued rebuilding is for fire survivors, but more will be speculative homes built on lots the original owners sold in the months after the fire after deciding not to rebuild, Woods said.

While some speculative projects have started, builders have been giving priority to fire survivors.

Were getting lot of people who originally didnt want to rebuild, said Keith Christopherson, who has built over 6,500 Northern California homes and now is working with more than 100 clients on burned lots, mostly in the Fountaingrove area of Santa Rosa. Some moved away and wanted to sell their lots and now are having second thoughts and want to rebuild. Some bought other homes, and now they see neighborhoods are coming around, so now theyre thinking about selling their current house and rebuild the house that burned.

As the rebuilds wind down with the release of more construction money from insurance policy and other settlements, the attention of homebuilding is expected to shift outside the fire areas.

In the main (Highway) 101 corridor cities, the housing pace is picking up dramatically, Woods said.

More single- and multifamily projects are lining up for Petaluma, Rohnert Park and Windsor, with communities further out on the horizon for Sebastopol and Healdsburg, he said. And recent action by the Santa Rosa City Council to give an initial go-ahead on a downtown master plan that calls for up to 7,000 housing units is attracting developers to start making that a reality in 2020, he said.

There are plans for and actual permits being pulled for a lot of new housing in the North Bay, but if were only at 3,000-4,000 homes after the rebuild, that leaves us 2,000-3,000 homes short of what we had three years ago, Woods said. That only exacerbated an existing problem with the shortage of housing.

Another existing problem for the construction industry has been labor, as thousands left the industry during the sectors several-year recession starting in 2006. The massive rebuild effort put a strain on specialty contractors and labor for commercial projects this year, according to Robert Cantu, president of Western Builders.

There has been some uptick (in demand) for warehouse projects for the cannabis effort, but weve never seen a rebound for everyday office space, he said. Because of the recession years back, companies got leaner and devices improved for work at home or from afar. Square feet per worker has gone way down.

Demand for retail projects also is down, because of the internet effect, according to Roger Nelson, president of Midstate Construction. The challenging environment for brick-and-mortar retailers competing with e-commerce has put pressure on owners of retail centers nationwide to keep spaces full.

We used to be predominantly retail, and now were predominantly housing, and affordable housing, he said. The company completed its 27th project for Santa Rosa-based nonprofit developer Burbank Housing. Thats something the Bay Area needs.

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It's all about the homes - North Bay Business Journal