Cost of building homes in the Central Valley is rising

FRESNO, Calif. (KFSN) -- Construction equipment lines empty lots around the Central Valley as builders get new developments off the ground across the Valley.

Building the new homes will take a few months, but getting to this point took years and a lot of money.

And when you zoom in on why it's so expensive, you can understand why "affordable" new housing is almost an oxymoron.

"There's not a lot of homes being built under $300,000 because it's expensive to build them," said Michael Prandini, CEO of the Building Industry Association of Fresno-Mader counties.

Prandini says it costs about $290,000 to build the average home in Fresno or Clovis -- not including overhead or profit.

Part of that is development fees between $30,000 and $40,000 per home and rising.

The regional transportation mitigation fee, for example, goes up about $500 soon.

"That's not a killer but when you add that $500 to the $600 to the $1000 to whatever all of a sudden you've got a very, very high fee," Prandini said.

Builders also report a drastically higher cost for materials since President Trump instituted tariffs on China. And they have to pay workers more in California.

"So labor costs are going up, materials costs are going up - concrete, lumber, everything that goes into a home is going up," Prandini said.

It won't get cheaper any time soon.

Governor Gavin Newsom promised to speed up housing development to help with affordability, but so far it hasn't really happened, and new regulations take effect on January 1, like mandatory solar paneling.

Prandini expects a rush on permits before the year ends, so builders can do as much as possible under 2019 rules.
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