Report: housing permits in Bay Area, California dropped in 2023

Housing construction
Mark Prado

The number of permits and housing starts dropped in the Bay Area and California in 2023, mirroring a nationwide trend, according to a new report from Point2.

Theoretically, new construction should be bolstered by the acute shortage of housing on the market. However, with supply chain issues piling up and loan rates for builders rising in 2023, developers’ confidence is going in the opposite direction, the report notes. 

Permitting activity in California has dropped for a second consecutive year, marking a 6% decrease compared to the previous year. This slowdown hints at mounting pressures for Californians in finding affordable housing across the state.

According to the report:

  • California issued 111,221 new permits in 2023, reflecting a 6% year-over-year decline from the previous year. Notably, the reduction in permits for single-unit buildings by 8% could limit homeownership options for many Californians.
  • The San Francisco-Oakland-Berkeley metro area saw the sharpest downturn, with permits for new homes plunging 32.3%. This means increased affordability pressures, and more challenges for residents searching for reasonable housing options.
  • The San Jose-Sunnyvale-Santa Clara metro area experienced a 7.3% decrease compared to 2022.
  • Napa issued just 338 permits for new housing units, a 69.1% drop.
  • Vallejo flipped the script, reporting a 23% increase in permits last year. The Santa Rosa-Petaluma area also bucked the Bay Area trend, showing a 3.9% increase from 2023.

Point2 has also assembled an extensive resource page featuring a year-over-year breakdown of residential construction data at the national, state, and metro levels spanning over the last decade.

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