REAL ESTATE NEWS...Will the drought dry up housing supply?

Last week Gov. Jerry Brown announced mandatory statewide water restrictions as surveyors found the lowest amount of Sierra Nevada snowpack since 1950.

The state’s water supply comes largely from snowmelt in the Sierra and other western mountains, and measures show the water equivalent of the snow is at 5% of normal. What’s worse is California’s rain season doesn’t start until the fall, while water usage is heaviest in the summer.

So how will this affect the construction of new homes in a state that is need of more supply?

Brown directed state officials to put a package of water saving incentives and limits in place to reduce California’s use of the diminishing resource by 25%, compared with use two years ago. In particular, the new regulation states all newly constructed homes and buildings must rely on drip irrigation or “microspray systems” for landscape use.

However, the new rules are something homebuilders can deal with. The group has already had to follow an existing strict code that limits water use that mandate low-flow toilets, faucets and showers. Homes constructed in the last decade in California are 50% more water efficient than older homes.

Tim Lewis, president of Roseville homebuilder Tim Lewis Communities, told The Sacramento Bee, the drought restrictions may prompt some homebuyers to rethink their entire approach to landscaping. He added that there are definitely microspray systems that use less water and his company has already begun installing artificial turf at some homes.

According to the California Homebuilding Foundation, local government issued permits for 85,000 new homes in 2014, about the same as the year before.

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