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Strong gains in Orange County’s multifamily sector have helped to push home construction in California to its highest level in a decade, according to a new report.

Permits for residential construction statewide were taken out at a 188,160 annual rate in June, up 25% from a year earlier, according to the Burbank-based Construction Industry Research Board. Multifamily permits accounted for a healthy 42% of activity, compared to a usual share in the 30%- or even 20%-range, says Ben Bartolotto, the nonprofit group’s economist.

“More than half of all the apartment permits were pulled in three cities—Irvine, San Diego and San Jose,” Bartolotto adds. Vacancies in all three of those communities have dropped to about 2%, he notes, as soaring house values have forced more people to rent instead of buy.

Overall, says Bartolotto, California developers are expected to build about 55,000 apartment units in the state this year. Though that would represent a healthy 40% gain from 1999, it would still be far short of demand.

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