Two new studies point to why housing is so expensive and hard to find in Fresno.
Fresno ranked No. 8 for the fewest housing permits issued in 2022 among metros with a population greater than 1 million, according to a study from Point2Homes.
Combined with data placing Fresno as No. 3 in the nation for lowest home vacancy rates, the ranking comes as rents in the area have grown more than 27% since the start of the pandemic.
In 2022, 3,678 permits were issued for housing in the Fresno area. Meanwhile, in the Sacramento area, 10,714 permits were issued last year.
Researchers with Point2Homes used data from the U.S. Census Bureau and the U.S. Bureau of Labor Statistics to assemble the ranking. Large metros are defined as those with more than 1 million people.
Like Fresno, Colorado Springs, Colorado has a low vacancy rate, checking in at 3.8%. But that metro area, with a population of only 693,000, is doing something to ease the crunch. It issued 8,818 permits for residential units in 2022.
Deputy Fresno Mayor Matthew Grundy said the study counts City of Fresno permit numbers while counting Fresno County population, comparing it to larger cities such as Pittsburg, Phoenix, Dallas and Chicago. If Fresno were ranked among mid-size metros, it would fall in the middle of the pack, below Stockton but above Portland, Oregon.
Fresno Resale Homes Average 18 Days on the Market
For people looking to buy a home in the region, Fresno’s 3.7% vacancy rate makes it No. 3 in the nation for unoccupied homes, according to todayshomeowner.com. Homes in Fresno also sell faster than the California average, spending 18 days on the market in March, compared to 19 days statewide, according to the California Association of Realtors.
That number has increased markedly since March 2022 when a home would average only seven days on the market before being sold. Rising interest rates, of course, have led to homes staying on the market a bit longer.
The vacancy ranking does not surprise Rick Ginder, principal for Ginder Development which builds apartment complexes throughout the Central Valley.
It’s been a few years since he has done a project in Fresno, Ginder said, but permits can take months. In cities such as Tulare or Merced, permits will be ready for him by the time he’s ready to break ground, he said.
A basic rule of economics states that a lower housing supply means higher rents.
“If the vacancy rate was 50%, rents would be half of what they are,” Ginder said.
Challenges of Building in California
Fresno officials aren’t the only ones to blame for the scarcity of housing starts. The state of California and the federal government have also made construction difficult.
Decades ago, plans were only a handful of pages. Now, plans can be 50 to 60 pages and take eight to 10 months to review.
To comply with requirements, Ginder said that he’ll have 25 pages of plans from a landscape architect he wouldn’t have needed 10 years ago for a project with a similar scope.
“The reason we don’t have cheaper housing is because of all the requirements we have,” Ginder said.
For their part, Grundy said permitting has improved over the past decade. Between 2013 and 2017, 6,304 housing units were permitted for construction. Between 2018 and 2022, there were 9,200 units permitted for construction, a 46% increase over a five-year period. The number of affordable units in that five-year period was four times more than the previous period, Grundy said.
Fresno's Struggle to Streamline Permits
Expediting building permits has long been a struggle in Fresno, with mayors as far back as Jim Patterson in the 1990s promising reforms to the development and permitting department.
“Business-Friendly Fresno” under former Mayor Lee Brand’s administration sought to streamline the city’s notoriously cumbersome permitting process with little success.
More recently, councilmembers have promised to simplify the Planning and Development process to address the ongoing housing shortage. Mayor Jerry Dyer said part of his housing strategy has been to make permitting easier.