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Business council: O.C. needs at least 50,000 new homes to keep up – and it’s getting worse

Business council: O.C. needs at least 50,000 new homes to keep up – and it’s getting worse

Unless the pace of construction picks up in Orange County, demographers project the shortfall will grow to 100,000 homes by 2040.

Cities are ranked by how much they contribute to workforce housing growth in Orange County.

Orange County homebuilding isn’t keeping up with job growth, creating a shortfall of 50,000 to 62,000 homes for the county’s growing workforce, a report by the county’s leading business association says.

And the problem is getting worse, according to the report released Tuesday by the Orange County Business Council. This year’s shortfall is up from 40,000 to 50,000 homes reported in a 2012 estimate.

Unless the pace of construction picks up, demographers project the shortfall will grow to 100,000 homes by 2040.

“Orange County cities stand at a crossroads – whether to plan for the future or remain stuck in the past, whether to be leaders in addressing the region-wide workforce housing challenge or not,” the report says.

Without adequate “workforce housing,” employers will have a harder time hiring qualified workers; young adults will continue to flee the area for more affordable housing markets; and the county’s economic growth potential will suffer.

Rising home prices and escalating rents also will make living here out of reach for recent college graduates, new families and moderate-income workers, the report says.

The answer, the business council concludes, is to build tens of thousands of more homes, reform state environmental laws that can stall housing projects and lower development fees.

The pro-business council includes investors from the building community, such as Irvine Co., Lennar Homes, Rancho Mission Viejo, Five Point Communities and the Orange County Association of Realtors.

“Orange County’s workforce housing supply holds the key to continued job creation, economic growth and economic competitiveness,” the report says. “Supply must catch up with demand.”

Meanwhile, several Orange County residents expressed bewilderment over calls for added construction, given the state is in the grip of the worst drought in over a millennium.

“Where are they getting the water for all these new homes?” asked Buena Park resident Paul Pavlovsky, 90, one of a dozen readers who called and emailed the Register in response to an earlier state report calling for increased homebuilding in Orange County and throughout California.

Water officials and environmentalists say development can occur with improved conservation.

For example, developments now use water-conserving fixtures and landscaping. The Santa Margarita Water District is partnering with developer Rancho Mission Viejo to capture urban runoff for irrigation.

A fifth of the Irvine Ranch Water District’s supplies comes from recycled water, cutting its reliance on imported water by two-thirds.

“We could use water much more efficiently than we are,” said Heather Cooley, water program director for the Pacific Institute, an environmental research group in Oakland. “That would support continued population growth with the water resources we already have.”

The workforce housing report, released Tuesday at a forum at Hoag Hospital Irvine, is the business council’s third “scorecard” since 2008.

The report includes rankings of Orange County cities according to how big a contribution they’re making to solve Orange County’s housing shortage.

Irvine moved from No. 2 in the 2012 report to the top spot in this year’s study based on increasing housing density, its jobs-to-housing ratio and its share of all housing in the county.

Second was Huntington Beach, followed by Fullerton, Lake Forest and Brea.

The lowest-ranked cities are smaller bedroom communities with little or no increase in housing density: La Palma, Laguna Beach, Villa Park, Seal Beach and Los Alamitos.

“Yes, the shortfall is getting worse,” said Wallace Walrod, the business council’s chief economic adviser. “But there are some cities – Irvine and (seventh-ranked) Anaheim – that have been leaders in this topic. They’ve taken the steps necessary to (meet future demand).”

Looking forward, Walrod said, north and central Orange County cities will account for most future growth. Because the majority of South County housing developments have homeowner associations and density restrictions, growth there is limited to single-family homes.

But central and north county cities are free to add high-density developments in “infill” areas and on ground now containing “under-performing” strip malls and industrial sites easily converted into apartments, attached homes and mixed-use developments. Parking lots can become future home sites.

Future development also is more likely to be located closer to jobs.

Some environmentalists agree.

“Building higher-density, affordable housing in places where there are a lot of jobs – that’s what we should be doing,” said Kathryn Phillips, Sierra Club California director.

But she disagreed that environmental laws like the California Environmental Quality Act, or CEQA, need to be streamlined to pave the way for construction.

“CEQA is not where the problem is,” Phillips said.

Contact the writer: 714-796-7734 or jcollins@ocregister.com

The Orange County Register – News Headlines : Real Estate News