CBIA Head Denounces ‘Ballot-Box Planning’

California home builders, riding a buying wave reminiscent of the 1976 housing market of lotteries, camp-outs and sell-outs, find themselves facing critical if not bleak prospects in the mounting and emotional limited-growth movement taking place statewide.

The growth issue, a major topic at the annual Pacific Coast Builders Conference here last week, came at a time when the industry is in its sixth year of an expansion economy, the longest in peacetime.

But now prices are escalating rapidly as prospective buyers, aware of the probability that housing supply may become limited if initiative measures limit home construction, are virtually creating a “hurry-up” market and vying for unbuilt homes.

Builders, aware of the ready market of buyers, can almost feel the pinch of the worst-case results of upcoming election measures designed to limit construction by setting quotas.

Roger Werbel, a Monterey Park-based builder and president of the California Building Industry Assn., labeled the movement “ballot-box planning” in a position paper on growth read at the conference.

He said existing impact fees levied against builders to provide schools, libraries, fire stations, parks and roads, already exceed $11,000 per home, and builders must pay that if they are to receive building permits. But those add-on costs are merely passed along to the home buyer, he said.

Before elections in June and November, Werbel said, the industry will attempt to educate the public that stopping growth or limiting normal expansion is detrimental to the entire economy, aside from its devastating effect on the housing industry and jobs in various housing-related industries.

A supportive but unrelated new survey, announced at the conference, on prospective home-buyer desires, sponsored by Great Western Real Estate of Santa Ana, showed that real estate represented the best single investment among 1,800 home shoppers surveyed at 77 new single-family detached housing projects throughout the state.

Results of “Insight ‘88,” the 12th annual consumer preference survey conducted by the market research and consulting division of Great Western Financial Corp., showed that 31% of the shoppers felt their best investment would be a primary residence.

Another 25% selected income property as their primary choice as an investment, resulting in a total of 56% of the shoppers picking real estate as their best investment choice.

Savings accounts were selected by 19% and stocks and bonds, by 17%.

Move-up shoppers, who own their homes, now represent 69% of all those surveyed. The typical home shopper was age 37, was part of a three-person household and had a median household income of $52,040.

That shopper was willing to pay $143,220 for a new home. About three of five households had dual incomes, and the majority of shoppers had lived in their homes five or fewer years.

Other highlights of the survey:

Parlors--sitting rooms of yore--appear to be in vogue among the shoppers, while living rooms are passe. Among the home shoppers, 69% would opt for a home with an entry parlor and more room in the kitchen and family area and forgo a living room.

More than 90% prefer single-family detached homes.

One of every five shoppers would spend an additional $10,000 to $20,000 for a spa and/or a pool. The $143,220 top price they are willing to pay for a home would require a $1,094 monthly payment for a 1,845-square-foot home.

Surprisingly, 14% of those surveyed favored a finished basement, despite its $20,000 price tag. There was no indication that they were all Easterners.

Additional coverage of the Pacific Coast Builders Conference will appear in next week’s real estate section.