This is the second of a two-part story, commissioned by Country Media and written by national journalist Kathleen Stinson, about housing issues facing the region stretching from Crescent City on the south to Gold Beach on the north. The first installment, focusing on Gold Beach and Brookings, ran last Wednesday.
Builders complain that stringent state building regulations are driving construction costs up in Del Norte County.
They say new workforce housing developments in Crescent City and unincorporated areas of the county are at a standstill, given the cost of complying with State of California building regulations.
In addition, the construction of smaller and more affordable homes called Accessory Dwelling Units (ADU) is proceeding slowly, according to area planners.
Unincorporated Del Norte County issued just three ADU permits in 2018, said Heidi Kunstal, the county’s community development director.
In fact, she said, the county has no developers that specialize in ADU or workforce housing.
Last year, the Del Norte County issued a total of 45 housing permits, 24 of which were “above the moderate-income housing level,” added Kunstal.
“Residential development (overall) has recently picked up,” she said. In 2014, the county issued 11 permits, increasing to 29 permits in 2015, 24 in 2016, and 34 in 2017.
Still, “In the old days, 45 wouldn’t be very many permits,” said Kunstal. “(But) at least we’re seeing an upward trend, which is good.”
Bob Brown of SHN, a Eureka, California-based consulting firm offering a variety of services related to planning, engineering and geology, is the county’s contracted planner.
Brown said he began his job in April and since then, no one has applied for an ADU permit. He said he doesn’t have any information about permits prior to April 2019.
One of the few local subdivision developers is Marshall Jones, owner of Jones Construction in Crescent City. Jones currently is building a 22-home subdivision called Smuggler’s Cove off Pebble Beach.
“There is very little opportunity left for (local) development,” said Jones. The complexity of state regulations is making it too expensive and too difficult to build homes.
He said the regulations put “too much of a risk on the developer” and “the cost is not retrievable. It’s a really compounded problem.”
Plus, there’s a shortage of developable land, he said. “I think we are going through a fundamental change in housing availability like we’ve never experienced before.”
Jones foresees a “massive change in housing availability, far worse than it is today.
That said, “I don’t’ see any possibility of being able to build workforce housing in any location in the county.”
Los Angeles and Bay Area developers have bigger budgets for home construction, he added. “(State regulations) are crippling poor communities that don’t have the funds.”
Sam Schauerman and Curt Lyon are partners who co-own Ridgeline Construction in Crescent City. Ridgeline currently is developing and building 20 homes north in Smith River.
Schauerman said he doesn’t know of any residential developments underway In Del Norte County, other than his and Jones Construction’s.
As for workforce housing, “We do offer smaller homes … starting at $275,000,” Schauerman said. “The cost of building is pretty high.”
The lowest price for a newly-constructed home in Del Norte County would be $275,000, he said.
“The cost of building is expensive in California,” he said. On Jan. 1, 2020, the state is requiring installation of solar panels on newly constructed homes, he said. He’s not certain what this in turn will cost a builder.
What’s more, said Schauerman, the price of land has gone up significantly. Early on, it was possible to purchase a building lot for $15,000. “Now, you can’t get anything for less than $35,000.”
For now, he said, his company has sold six houses in its current development, with 14 lots left to build on. “If we sell these homes,” said Schauerman, “we will look at building another subdivision. Things are going pretty well right now.”
Says Del Norte County District 1 Supervisor Roger Gitlin, “The government needs to put a moratorium on some of its more-restrictive development requirements so we can get the ball rolling again.”
The California Coastal Commission has very stringent requirements for developing along the coastal, declared Gitlin.
“If you want to build a new home, everything adds to the cost,” he said, “to the point people say, ‘I don’t want to do it,’ which hurts our economy.
“There has to be some relaxing of these rules. The state is out of touch with counties like ours.”
Pointing to builders in Malibu, for example, Gitlin said they can pass on the costs of their building requirements to homeowners more easily than those in areas such as Del Norte County.
“(State officials have) a one-size-fits-all mentality,” he said. California’s stringent building requirements don’t “fit in with rural California.”
Kurt Stremberg and his wife, Doris, own Stremberg Realty in Crescent City. Kurt Stremberg said he has 44 years of experience as a real estate agent and broker in the Crescent City area.
“The real estate market was at its peak from 2003 to 2004,” he said, “but by the summer of 2006, agents were crossing their fingers” they could close on their property sales before the end of the summer.
The Great Recession was closing in.
He said it took six or seven years for the subsequent economic recovery to arrive in Del Norte County. During that time, a large portion of the residential housing market was driven by investors who bought up foreclosed homes.
When the recovery finally did arrive, buyers looking for second or vacation homes did not come to Del Norte County, said Stremberg. “It was too far removed.”
Now, in 2019, “the market is strong,” he said, but for-sale home inventories are “down to one-third of normal.” That’s in part because for a long time, “builders would typically build one home at a time, sell that and then build another.” They weren’t building subdivisions.
Stremberg added that a shortage of developable land is another factor limiting the region’s residential home construction. “Eighty percent of the county (land) is controlled by the federal or state government,” he said. Timber companies that harvest the forest control a portion of the remaining 20 percent.
“Very little land is left for residential development,” he said. “It doesn’t leave a lot of room to grow.”
One result: it’s has been several years since multiple-unit apartment buildings have been constructed here, he said.
Meantime, the Tolowa Dee-ni’ Nation is constructing housing in Del Norte County, Kunstal said. (Attempts to contact the tribe for comments were unsuccessful.)