The Perfect Storm for Developers & The Reason TrendAmerica Is In Demand
The California Housing Market-Supply Shortage Crisis represents an opportunity for real estate developers. California Government Code Section 65589.5 states that "California has a housing supply crisis of historic proportions" and has accumulated an unmet housing backlog of nearly 2,000,000 units.
The state must provide for at least 180,000 new units annually to keep pace with growth (State Senator Scott Weiner provided a fact sheet showing the State is in need of at least 300,000 new homes annually). Yet during the last 10 years, housing production averaged fewer than 80,000 new homes each year — falling far below projected needs.
California experienced a housing bubble burst in 2005-2006, the 2008 stock market crash, and the 2020-2021 COVID-19 pandemic, resulting in new home construction falling to a 10-year undersupply. That's a decade of housing shortage to overcome, creating unprecedented demand from homebuilders for entitled land.
This crisis has resulted in the enactment of several State Housing Bills (Senate Bill 330, Assembly Bill 131, Senate Bill 131, and Senate Bill 79) designed to significantly increase the approval of new housing by curbing the capability of local governments to deny or reduce the density of housing development projects.
These Bills were opposed by many cities and counties in California because they attempt to diminish the power and authority that city and county Planning Departments, City Councils and County Supervisors have to obstruct or deny new housing development for subjective reasons and biased agendas. Today, planning Departments will put up every obstacle to development they can think of or conceive, and can take recalcitrant, resistant and challenging positions on future development projects. To our advantage, TrendAmerica has a wide range of expertise, considerable experience and extensive success to address any opposition from such local jurisdictions. We are Battle Tested.
By taking a property from its non-entitled state to an approved residential subdivision, then selling it to a homebuilder, we increase the homebuilder's Return on Investment and Internal Rate of Return because the land value is not on their books during the entitlement process.
Interest Rate Buydowns: New homebuilders need to preserve cash to buy down interest rates for their homebuyers — providing mortgage rates 2% lower than prevailing rates. By deferring the cost to carry and entitle land, they have the cash available to offer these competitive rates.
As Kate Kaminski, COO for Walton Global (controlling over 90,000 acres nationwide) stated on Bloomberg News: "Under the current economic climate, new homebuilders will only consider buying entitled land."
This is the formula that has been working for homebuilders the past 3 years. Our experience is they will continue to use it even if rates go down. This formula increases home sales, profits and returns. If something works, homebuilders don't fix it! The 30 year fixed mortgage rate in California in February 2026 was 5.69% - 6.12%. These rates are substantially higher than the 3% rate of just a few years ago. Therefore, homebuilders continue to need to buy-down rates with the cash they retain by avoiding the costs to entitle property — which is a boost to our profession. Most experts say it is highly unlikely that interest rates will return to 3% in the near future without another major economic crisis like the Covid-19 Pandemic, which was the catalyst for the Federal Reserve to lower rates to 3%, and is not a sustainable level. Thus, it is predicted a gradual decline from current high levels will remain well above 3% for the foreseeable future.
We control property through option contracts rather than owning it outright. This minimizes stakeholder investment, avoids substantial debt, and reduces risk while maintaining full control during the entitlement process.
We obtain tentative subdivision map or planned development approval, utilizing our deep expertise working with City/County Planning Departments, City Councils, Planning Commissions, and County Supervisors.
We negotiate with multiple homebuilder candidates, secure competitive offers, and close quickly since the property has an approved map. Profits are distributed immediately to stakeholders.
We are California's housing shortage solution, taking underproducing properties and maximizing their value — whether it's raw land, closed school sites, wholesale nurseries, defunct oil well sites, or commercial property suited for residential conversion.
We sell "Paper Lots" — approved subdivision maps without infrastructure installation or construction. We don't put a shovel in the ground, avoiding the high-risk development phase.
Our team has worked for the largest national homebuilders. Our Project Financial Analysis Proforma mirrors theirs exactly, giving us a distinct advantage in negotiations.
We use the homebuilder's purchase money — not stakeholder funds — to pay the underlying landowner, requiring less upfront capital while maintaining full control of the property.
We have extensive experience as public planners and city council members, as well as private real estate developers. We navigate regulatory challenges others can't.
On every one of our projects, we have obtained approval. We get timely approvals in highly regulated California — which scares off many national homebuilders — because we're not afraid and have the track record to prove it.
California is the most highly regulated housing approval process in the nation. It can be very difficult to obtain subdivision approvals. That's to our advantage at TrendAmerica, because we have vast experience and knowledge in California entitlements and know how to navigate the regulatory maze fluidly and skillfully.
We focus on supply-constrained markets in Southern California — San Diego, Orange, Los Angeles, and Riverside Counties — areas with high demand for housing and homebuyers with high incomes.
Even with population changes in California, we focus on micro-market areas where there is high demand for housing and homebuyers with the ability to purchase homes in higher-priced markets with the best schools and amenities.
Join us in solving California's housing crisis while maximizing returns on your investment
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