Meritage Homes has delayed the Manteca Planning Commission's review of a proposed subdivision in southeast Manteca, citing weak market conditions and saying it hopes to move forward in the first quarter of 2027. The project, described in the delay announcement as a 305-home development, sits on 58.45 acres along the west side of Sedan Avenue.
According to the Manteca Bulletin, the company cited market conditions but indicated it would assess the situation before the end of the year, with hopes of moving forward in early 2027. Thursday's agenda item was a continued public hearing meant to determine whether the project was exempt from further review under the California Environmental Quality Act, the newspaper reported. It marked the second time this year that Meritage has requested a continuance of a scheduled public hearing on the project, though earlier continuances were requested well in advance of the commission meetings.
Notably, a separate report from the same outlet on the annexation process for the acreage at 9715 Sedan Avenue describes the project as a 310-home plan rather than 305 homes — a discrepancy that remains unresolved in the public record. The Sedan Avenue parcel abuts the west side of the road between two 90-degree curves, where Sedan Avenue runs primarily east-west before briefly turning north-south.
A Development Deal Years in the Making
The project requires annexation to the city, and that annexation requirement gave Manteca leverage in negotiating a development agreement, the same report notes. Mayor Gary Singh and Councilman Mike Morowit, who both serve on the council's economic subcommittee, negotiated terms under which Meritage agreed to pay up to an additional $16,000 per home for community benefits — on top of required growth fees and water and wastewater connection fees the city has sought from builders. That per-home payment drops to $12,000 if paid when a project phase starts rather than later, and the arrangement could generate as much as $4.86 million if paid when building permits are issued, per the report's figures.
The condition is not unique to this project. The same community-benefit structure mirrors terms Singh and Morowit negotiated for a separate 147-home subdivision in north Manteca, according to the outlet's reporting. That smaller, 39-acre project — located north of the Indelicato neighborhood being built by Kiper Homes and west of Del Webb at Woodbridge — could contribute up to $2,352,000 toward city community-benefit projects.
Once a development agreement is adopted and tied to development entitlements, it generally cannot be changed unless the private-sector party scraps the project and restarts it, the paper reported. An applicant may also sell the map to another developer, though the article noted there was no indication beyond the continuance request itself that Meritage was considering changing the agreement.
Political Crosscurrents in a Mayoral Race
The delay's timing has drawn attention because it lands amid a Manteca mayoral election, raising questions about whether a national builder might seek a less advantageous development deal from a different city administration. A California Homeowners Association Political Action Committee launched a $15,000 negative social media campaign aimed at defeating Singh less than a month before the Bulletin's report, with campaign filings required by the California Fair Political Practices Commission describing the spending as funding digital videos opposing Singh and ad placement across various platforms.
The Building Industry Association has been the largest contributor to that political action committee, the report states, and the BIA of Southern California's board includes representatives of Pulte Group, Taylor Morrison, Trumark and Lennar Homes — companies with active projects elsewhere in Manteca, including Lennar's Cedar Point neighborhood on Austin Road, Pulte's and Taylor Morrison's homes in Oakwood Trails in southwest Manteca, and Trumark's homes in The Collective on Louise Avenue east of Highway 99. Singh, for his part, accepted no campaign donations from developers this election cycle, according to the same report. Several developers have resisted the city's broader push to secure extra community-benefit funding beyond standard fees, and one Bulletin article on a separate north Manteca project observed that elected leaders increasingly want growth to pay for everything it legally can — a framing visible in that project's additional fees, which totaled $11.1 million, or $24,550 per home, including $12,000 per home earmarked for a community park.
A Market That Keeps Pulling Back
Meritage's caution in Manteca echoes what the company told investors just weeks earlier. The Phoenix-based builder reported third-quarter adjusted earnings of $1.11 per share, missing the $1.17 consensus estimate, according to a transcript published by Investing.com. The company closed 3,187 homes during the quarter, down 14% from a year earlier, and logged 3,083 sales orders, down 15%.
Meritage pointed to higher mortgage rates, softer demand and heavier sales incentives as the forces weighing on both revenue and profit, and it described conditions as weaker in parts of California than in several other markets it discussed, alongside Denver and Arizona. The builder declined to offer fourth-quarter or preliminary 2027 guidance, saying the market is moving too quickly and visibility is too limited, and it said it expects incentives to stay elevated unless mortgage rates fall meaningfully.
Mortgage rates have, in fact, been inching down. Long-term rates dropped for a third consecutive week as of the Bulletin's report, and separate data cited by CNBC shows the average contract rate for 30-year fixed mortgages with conforming balances slipping to 7.3% from 7.37% the week before. Even so, rates remain about a full percentage point above where they stood a year earlier, and purchase mortgage applications were running 19% lower year over year, with total application volume down 1.2% week over week. Whether that national pullback is what prompted Meritage's Manteca delay specifically, the company has only said it is citing market conditions broadly — leaving the exact calculus behind the Sedan Avenue postponement, and the fate of the Thursday hearing, unresolved for now.
