As it emerged from the Great Recession and a moribund housing market, Sonoma County in 2011 needed seven years to build nearly 5,000 new homes.
The fires of October wiped a greater number of houses and apartments off the map here in a single day.
The unprecedented disaster deepened an existing housing crisis and fueled calls by local officials to dramatically accelerate the pace of new home construction — perhaps to a level never before seen in the county, even in the decades-long building boom following World War II.
By two recent estimates, a yawning gap exists between the housing stock the county had before the fires — about 208,000 homes, apartments and other units — and what is needed to keep the economy growing and to comfortably house a wide range of workers and families.
It could be as high as 30,000 units — equivalent to what exists in Rohnert Park, Windsor and Sebastopol — according to county supervisors, who set that figure as an ambitious five-year building target that would include both the burn areas and surrounding communities.
“We are eroding the character of our county by not allowing people who work here to live here and be a part of the community,” said Board of Supervisors Chairman James Gore. The county, he said, came up with its estimate of 30,000 homes “not as a hopeful aspiration, but as an analysis of how much we’re short from a healthy housing market.”
But some leaders in the local building and real estate industry say there is no conceivable way for the county to build 6,000 houses and apartments a year, equivalent to completing 16 homes a day. The obstacles, builders say, include insufficient levels of labor, materials and projects ready to go.
For most of the past decade, contractors in the county have built 700 or fewer units a year, builders note.
“The likelihood is that we will be woefully short of that (30,000 units) for a number of reasons out of our control,” said Keith Woods, chief executive officer at the North Coast Builders Exchange, a Santa Rosa trade group.
In discussing what can be done, both city and county officials have suggested that hundreds of new multi-family units could be built on existing downtown parking lots in Santa Rosa; near SMART train stations; and on the current Santa Rosa City Hall and Sonoma County government campus, which could be freed up by consolidating two headquarters into one.
Santa Rosa Mayor Chris Coursey said such “game changing” projects should be considered because the housing shortage threatens to undermine the local economy, pushing out current residents and discouraging businesses and workers from moving to the area.
“We talk about it as a crisis,” Coursey said, “and it is a critical issue for us to be tackling right now.”
To bolster their case, county officials this month obtained a second estimate from an outside economics firm that concluded the county should build 26,000 new housing units by 2020. The extra units are needed to deal with “employment growth, fire losses and overcrowding,” according to a report from Los Angeles-based Beacon Economics.
To spur a building boom, county voters this November may be asked to tax themselves for a slice of the hundreds of millions of dollars that proponents here hope to raise for subsidized, or affordable, housing projects.
The pace of recovery
The increased efforts come as the outlook has grown starker for a speedy recovery in neighborhoods burned by the October wildfires. Four months after the disaster, many politicians, builders and neighborhood leaders expressed worry that large numbers of fire survivors aren’t going to rebuild, often because their homes were underinsured.
Building leaders also warn the pace of recovery will be hampered by scarce resources, especially a limited pool of construction workers.
“I’m telling people this is a decade--long process,” Woods said. “Right now the magnitude of the disaster is at the root of all our problems.”
Based on his conversations with potential builders, Woods predicted the county is on track to rebuild about 3,500 of the 5,300 burned homes in six years.
Similar sobering assessments on the pace of new construction have come from many in the building and real estate community, who for years encouraged local officials to allow more housing projects.
Some questioned whether the large goals and wide-ranging explorations ultimately will boost or drag down the efforts for new homes.
“I fear that there is too much unfocused discussion and not enough concentration on what can be done now and in the near future,” said Santa Rosa developer Hugh Futrell. “As a community we’ve done far too much envisioning and not enough building.”
To rebuild or not to rebuild
The October wildfires claimed 40 lives and destroyed more than 6,000 homes in four North Bay counties. Residential insurance claims are approaching $10 billion.
Of the 5,283 homes destroyed in the Sonoma County, 3,067 were in Santa Rosa. More than 2,200 homes were destroyed in the unincorporated county.
For fire survivors, the clock keeps ticking as many try to pin down the size of both insurance payouts and building estimates. Those who plan to rebuild say they want to complete the task within two years because that is when their insurance money will end for temporary rental housing.
By Friday morning, a total of 40 homeowners had received building permits to reconstruct their homes — 24 in the city of Santa Rosa and 16 in unincorporated areas. Only a few are under construction, including eight in Santa Rosa, according to city planners.
Jeff Okrepkie, chairman of the Coffey Strong neighborhood rebuilding group in Santa Rosa’s Coffey Park, said roughly half the renters and owners might not return to some burned neighborhoods around the county. The survivors who rebuild will be those with the financial means, the determination to stay and the willingness to tackle the time-consuming complexities that come with construction projects.
“Everybody else is out,” he said.
Many agreed the wildfires’ toll on housing has given elected leaders a new sense of urgency, perhaps tipping the political scales for those supporting a new embrace of housing development.
“It’s our issue right now, and I think this is our defining moment,” said Santa Rosa Councilman Jack Tibbetts.
A leader in the push for a countywide housing bond, Tibbetts, 27, said the housing crisis was “the main issue that made me want to run for office” in 2016. “I saw it affecting people in my generation,” he said.
In past decades, debates over housing projects here often were framed with warnings that Sonoma County was on track to become either the next San Jose, an archetype for sprawling development, or the next Marin, a county where high housing costs have long forced legions of workers to make hour-long commutes along clogged freeways.
Local officials said environmental concerns have been allayed somewhat by the establishment, starting two decades ago, of urban growth boundaries that protect open space near cities here. As those boundaries have come up for renewal, they have been reauthorized by voters every time, including an overwhelming vote of support last November in Windsor.
Also, officials said, many residents now see benefits to city-centered growth if it means reducing commuter trips and cutting greenhouse gas emissions.
Years of soaring prices, rents
As recently as 2005, county contractors pulled 3,000 building permits for the construction of new houses, apartments and condominiums. But starting in 2008, home construction plunged to historic lows in the midst of a national housing crash.
The lack of building is credited with contributing to soaring rents and home prices in the county. House prices have doubled in the last six years, with the median single-family home last month selling for $670,000.
Rents also have risen steadily in that same period. In January the average monthly rent for a two-bedroom apartment climbed to $1,980, an increase of 9.5 percent from a year earlier, according to Apartment List.
For the past five years, the county and its cities have issued an average of 716 building permits annually for new homes, according to the Beacon Economics analysis. The Los Angeles company was founded by economist Christopher Thornberg, who regularly speaks in Santa Rosa at economic outlook breakfasts.
Local economy plays a role
Over the same period, the local economy has added nearly 6,300 jobs a year, according to the state Employment Development Department. Local employers are creating jobs at a much faster pace than builders are erecting places for them to live.
In addition to rebuilding the 5,300 burned homes, the company projected the county needs 8,143 units to provide for projected job growth and another 12,631 units to alleviate overcrowding — the latter figure derived from U.S. Census data.
In contrast, the county based its estimate of 30,000 homes partly on the number of low-income families who pay above-average portions of their incomes toward housing. County officials said the two estimates fall within the same order of magnitude.
Robert Kleinhenz, Beacon’s executive director of research, said the housing shortage likely will limit future economic activity. It already may have contributed to a lack of growth in the county’s labor force last year.
“If you don’t build sufficient housing to meet a growing workforce, then at some point you may find some businesses just can’t grow,” he said.
The problem is by no means limited to Sonoma County. California in the past decade has built less than half of the 180,000 units needed each year, and nearly a third of state renters pay more than half of their income for housing, according to a study last year by the state Department of Housing and Community Development.
“You’re seeing this story unfold in a lot of places,” said Egon Terplan, regional planning director at the San Francisco Bay Area Planning and Urban Research Association. “We’re hearing from a lot of people in the Bay Area, ‘My children can’t afford to be here.’ ”
Officials seeking solutions
The shortage is prompting a new generation of elected officials to seek solutions, including a possible county housing bond.
“We simply don’t have the resources we need to create the change that we need,” said county Supervisor Lynda Hopkins, who was elected in 2016 to represent the west county.
Details on the costs and benefits of a November bond measure are still being developed. But Hopkins and other officials said a bond could help the county become eligible for hundreds of millions of dollars in state and federal funds for subsidized housing projects. Obtaining the outside dollars requires a local match.
Hopkins maintained the county needs to take action because the high cost of housing is causing “an exodus of young families and a drain of talent” as workers leave for places more affordable to live.
“During the past 10 years I’ve lost so many friends,” she said.
One reason many contend the October disaster upended the long-entrenched debate over housing development, causing more to favor new home construction: Most residents have friends or family who lost homes or who have had great trouble finding places to live.
“The fire catalyzed a consensus about housing,” said Tennis Wick, the county’s planning director.
As evidence, Tibbetts shared polling data for the housing bond. He reported that county support for a bond for workforce housing grew to 71 percent this year, compared to 66 percent before the fire. If that increased level held, it would mean success in passing a housing bond, which officials said would require two-thirds voter approval.
Planning officials said they already have made changes to expedite reviews to rebuild homes and approve new projects. They also have changed rules to encourage the construction of granny, or second dwelling, units. And they have conducted planning studies near some SMART rail stations and in downtown Santa Rosa that address state-required environmental reviews.
“We know we can’t get housing built unless we add certainty to the process,” said David Guhin, the city’s planning director.
A spot for growing projects
The downtowns of local communities are cited as the most likely place for larger housing projects. One of the more ambitious ideas would turn the existing Santa Rosa city hall and county center complexes into housing sites and build a multi-story office tower to house city and county workers, possibly at a current parking lot at Third and E streets. Officials compare the idea to a similar public-private venture underway to provide housing and new government offices in Long Beach.
If elected leaders decide to proceed, the joint effort could provide “a scale of development that will attract international builders,” said Margaret Van Vliet, executive director at the county’s Community Development Commission.
Skeptics countered that most of the proposals sound neither quick nor easy. Some pointed to the recent demise of two developments proposed along the SMART rail line in Santa Rosa and Petaluma. Those sites should garner some of the largest levels of public support for development anywhere in the county. Nonetheless, after years of effort, construction at both locations remains nowhere in sight.
Futrell said government has relatively limited powers to bring about the market-rate developments needed to reduce the housing shortage. For many developers, he said, margins remain tight when comparing the cost of building a project “versus what it’s worth when you’re done.”
Greater margins exist in other areas, he suggested. The development and building costs here can equal or exceed other parts of the Bay Area, he said, but developers will receive lower rents or sales prices for the completed units.
Woods said he wants the community to take “a giant reality pill.”
A key concern is a lack of construction workers, of “actual people to apply hammer to nail,” he said.
Also, local governments now find their budgets stretched by reduced property taxes and greater costs, both a result of the disaster. The new belt tightening could affect how fast the county and city of Santa Rosa can push for such projects as a joint government complex, said county Supervisor Susan Gorin, who represents the Sonoma Valley and eastern Santa Rosa.
“We have some economic recovery to do as a result of the fires,” she said.
Nonetheless, several local officials said their job is to call on the community to aim high, to learn by trying and to do everything possible to alleviate the shortage.
“If I’m going to fall,” said Gore, “I’d rather fall forward than backwards.”
Gore doubted a lack of labor will ultimately determine how many fire survivors replace their burned homes. “I think that number is going to be determined by people who don’t have the money to rebuild,” he said.
In his conversations with fire survivors, about half tell him their insurance companies will provide enough money to replace their homes. The other half express worry or tell him, “I’m going to a lawyer.”
By year’s end, the county should have a clearer sense of the pace of rebuilding efforts, said longtime Santa Rosa builder Keith Christopherson. But in recent conversations with fire survivors, he also is hearing “a lot of angst out there with insurance.”
“There’s going to be a lot of people selling their lots,” Christopherson said.