Estimates of State Housing Shortage Overstated

But shortfalls in major metro areas are cause for concern

SAN FRANCISCO - California's housing shortfall is much smaller than previous estimates and is almost entirely confined to the state's three largest metropolitan areas, according to a report released March 10 by the Public Policy Institute of California.

The report, "In Short Supply? Cycles and Trends in California Housing," finds a statewide housing shortage of around 138,000 units. Although a substantial shortfall, this figure is far lower than estimates often cited in the media - ranging from 500,000 to over 1 million units.

Why the gap?

Many estimates simply compare housing production rates across decades - new housing production in California fell from 2.1 million units in the 1980s to 1.1 million in the 1990s. However, the authors argue that the drivers of supply and demand - especially larger economic and demographic factors - must be taken into account when considering the size of the shortage. Indeed, they find that those factors explain most of the anemic housing production during the 1990s. These factors include:

• The severity and duration of the early 1990s recession.
  
• A dramatic slowdown in population growth during the 1990s.
  
• A change in the composition of population growth in the 1990s: Immigrants and children - who consume less housing than others - constituted a larger share of growth.
  
• Developments in monetary policy and financial markets, including investments in stocks as opposed to real estate, in the late 1990s.

Although these findings do not point to a large statewide crisis in housing production, the report does find significant shortages in the state's three largest metropolitan areas - Los Angeles, the San Francisco Bay Area, and San Diego. The magnitude of these shortages is lower than previous estimates, but they are still significant - 101,000 units in Los Angeles, for example. The authors find that shortfalls in these areas are partially offset by surpluses in other geographic areas, including Fresno and Sacramento counties.

"There are some serious regional concerns about housing supply and affordability in California," says Hans Johnson, a demographer and PPIC research fellow who co-authored the report with Rosa Moller (California Research Bureau) and Michael Dardia (SPHERE Institute). "However, we do see evidence that the magnitude of the statewide crisis has been overstated."

Indeed, the report notes that the state's housing situation in 2000 was perhaps better, and certainly not worse, than in 1990.

The Public Policy Institute of California is a private, nonprofit organization dedicated to improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett.

Senior Housing Apartments Open in Anderson

ANDERSON - Regency Place Senior Apartments, a community designed to serve very low-income seniors with physical and/or mental disabilities recently had its grand opening in this Shasta County city.

Long Beach-based Simpson Housing Solutions LLC and LINC Housing acted as partners in the development. The $8.51 million project was built by Gifford Construction. The development cost was $9.46 million.

Regency Place has 81 one- and two-bedroom apartments ranging from 597 to 873 sq. ft. The 6-acre property is in the heart of Anderson's town center, adjacent the Anderson Senior Center.

The complex is a two-story, elevator-served facility with concrete tile roofs and stucco finish. It was constructed around a central courtyard.

"There is a large and growing senior population in Anderson and surrounding Shasta County who live with a variety of disabilities and yet can still live independently in an environment offering specialized assistance and services such as those we have built into Regency Place," said Moe Mohanna, vice president/development at SHS. "This community goes well beyond the requirements for handicap adaptability mandated by the Americans with Disabilities Act," he added.

SHS has developed and/or financed more than 20,000 units of affordable housing throughout the nation. The company is a wholly owned division of Denver-based Simpson Housing Limited Partnership.

Tetra Tech Wins U.S. Navy Contract

PASADENA - Tetra Tech, Inc., a provider of consulting, engineering, and technical services, was awarded a Comprehensive Long-Term Environmental Action Navy contract with a value of up to $80 million.

Tetra Tech will provide program management and technical environmental services to the Engineering Field Activity, Northeast, Naval Facilities Engineering Command. The contract has a one-year base period and nine one-year options. Work will be performed primarily at U.S. Navy and Marine Corps sites in Rhode Island, Maine, Connecticut, Maryland, New Jersey, New York, Pennsylvania, Virginia and Massachusetts.

Tetra Tech will provide remedial investigation, remedial design, environmental documentation for base closure efforts, and support of expedited response actions. The contract also includes support of the U.S. Navy's Munitions Response Program and its Range Sustainability Environmental Program Assessment.

"We believe that this will be an important contract vehicle to help the U.S. Navy and Marine Corps modernize and transition their fighting forces, especially if future base realignment and closure actions take place." Said Li-San Hwang, Tetra Tech's CEO and chairman.

EMCOR Group Realigns Top Management

NORWALK, Conn. - EMCOR Group Inc., a global provider of mechanical and electrical construction services and facilities services has made major changes to its management structure.

Jeffrey M. Levy has resigned from his position as president and COO. Frank T. MacInnis, EMCOR's chairman and CEO, will assume the additional title and duties of president until a successor Levy has been named.

Michael Parry, 58, has been appointed to the newly created position of CEO of EMCOR Construction Services, reporting directly to MacInnis. In his new position, Parry will oversee the strategic direction and day-to-day operations of the company's U.S. electrical and mechanical construction operations.

Parry was previously executive vice president of EMCOR's Construction Services division with responsibility for electrical operations. Parry has 25 years of experience in the engineering and construction industry.

John Warga, 62, fills the newly created position of executive vice president and CFO of this unit. Warga has been with EMCOR companies for 30 years.

Also, William A. Rodgers Jr., 46, has been appointed president and CEO of EMCOR Facilities Services. He has strategic development and operational management responsibility for EMCOR's U.S. Facilities Services operations. Rodgers previously served in various executive positions in operations, finance and new business development for the integrated facilities management division of Johnson Controls Inc.