A Fistful of Cash for a Handful of New Houses
Six new homes were completed and available for sale at the end of June in all of Ventura County. Don’t bother calling; the homes, all priced well above $300,000, have long since been sold.
Earlier that month, prospective buyers camped out in front of model homes in Camarillo and Thousand Oaks the night before sales opened. Hours later, the homes, which hadn’t been built yet, were sold, and most of the remaining buyers were put on a waiting list. In nearby Moorpark, most of the 1,500 people waiting for a chance to purchase 37 new homes in another development were turned away.
That ritual has become common in Ventura County, where buying a new home is often a game of chance. Eager buyers search out new construction sites, put their names on waiting lists and participate in lotteries for a shot at the new home of their dreams.
Things are not likely to change in the near future, with development interests blaming local growth-control measures and slow-growth advocates blaming profit-minded builders. Despite criticism of the slow-growth movement, the number of building permits that have gone unused as well as the average number of permits issued under growth-control guidelines suggest that limits are not the sole factor.
Caught in the middle of the home-seekers’ gridlock are the first-time buyers, as well as homeowners seeking larger houses to accommodate growing families.
“People are just desperate for housing,” said Dawn Marie Wilson, a real estate sales agent for Barclay Hollander Corp., a development firm that in March sold all of its 92 Camarillo-area townhouses in a single weekend.
“We could have sold them in an hour, but it took two days to fill out the contracts,” Wilson said of the townhouses, which ranged from $130,000 to $163,000. “At 7 a.m. there were more than 200 families waiting in line.”
Cost Ranked 4th
This year, high demand and a short supply of used and new houses pushed Ventura County housing prices at the end of the second quarter to the fourth highest in the nation among major metropolitan areas, officials at the National Assn. of Realtors said. The county’s median price for a single-family home at the end of June reached $193,394, putting Ventura County prices between those of San Francisco and the New York metropolitan area.
By the end of July, the county’s median price for a single-family home had jumped to $205,494, a 27% appreciation over the previous July. The median price for new single-family homes is now about $280,000 countywide. Half the houses sell for more, and half sell for less than the median price.
Stable interest rates, which have fueled record home sales and pushed up prices in most Southern California areas, are also largely responsible for the frenzied buying and high prices in Ventura County, real estate analysts say.
But development and business groups in Ventura County contend that growth controls in eight of the county’s 10 cities have disrupted the housing market and pushed prices up even higher. Cities with growth-control measures -- only Oxnard and Port Hueneme lack them -- limit the number of new building permits issued annually.
“I’ve been in this business for 30 years and I’ve never seen a new home inventory of six units in what is basically a major metropolitan market, one with a population of almost 650,000 people,” said Don Edwards, president of the Marlborough Development Corp. and the county’s Building Industry Assn.
Besides the six completed houses, 146 more new homes were available for sale in Ventura County at the end of June, but none of those had been built yet, local real estate statistics show. In a normal housing market, experts say, there should be about a 10-month supply of homes. But the 152 new homes offered for sale at the end of the second quarter represents only a little more than a week’s supply of housing, they said.
The prospect for buyers seeking used homes is somewhat brighter. For example, in the eastern part of the county, local real estate boards estimate that there were a little more than 1,000 new and used homes for sale at the end of July. That area, which includes Thousand Oaks, Simi Valley and Moorpark, has a total population of about 225,000.
The reason for the housing shortage is clear, Edwards said. “It’s because of growth limitations and the county’s policy severely limiting growth in unincorporated areas. Prices are up because there is a shortage of land on which housing can be built.”
As newcomers to the area first notice, there is hardly a shortage of undeveloped land in Ventura County. Large expanses of open, rolling hills and thousand of acres of farmland separate the cities in most of the county. But the fight to keep those open areas free from development has been a long one, residents and elected officials say.
Traffic, Air Pollution
And despite the idyllic atmosphere of many of the semi-rural communities that make up Ventura County, it has its share of problems associated with growth.
The air is ranked the fourth-worst in the nation by the Environmental Protection Agency. Commuters on the county’s Ventura, Simi Valley and Moorpark freeways, which serve as the area’s main traffic arteries, face bumper-to-bumper traffic during rush hours. New schools in the fastest-growing areas, such as Moorpark, are already filled to capacity.
Those conditions, which began in the late 1970s, prompted residents and homeowners groups to first lobby local officials and then initiate the growth-control ballot measures that were passed in the early 1980s.
Politicians who at first were reluctant to support growth-control measures now embrace them, as their constituents have come to demand them.
“Growth control was once considered something expected from people on the political fringe, the members of Greenpeace and the Sierra Club,” said Moorpark City Councilman Clint Harper, an early advocate of growth-control measures in that city. “Now it’s a middle-of-the-road issue. It’s hard to find anyone running for office on an anti-growth-control platform.”
Harper and others say that trying to blame a shortage of new and affordable housing on growth control is demagoguery by members of the real estate and building industries.
“Developers are only building expensive homes, selling Cadillacs with all the accessories because there is more money than in selling stripped-down Fords,” Harper said. “I can understand economically why they are doing that, but I get angry when they lay the blame on controlled growth.”
It is, in fact, unclear how effective growth control has been in keeping a lid on new home building in Ventura County cities. In Thousand Oaks, for example, the number of building permits issued for new homes each year has averaged nearly 1,000 since the city passed its growth-control measure in 1980, city records show.
Although the Thousand Oaks law allows only 500 building permits a year, exemptions for government-subsidized affordable housing, as well as one 2,500-home development that was exempted from controls by court order, have pushed the average nearly to the level of building permits before growth control, city records show.
That average was reached even though not all of the available number of building permits were sought by developers last year, city planners said.
Camarillo, which passed its growth-control law at about the same time as Thousand Oaks but allows only 400 home permits a year, has more than 610 unused permits, which have accumulated since passage of the law, city planners said. They have accumulated because builders did not use the two-year permits before they expired, or because builders failed to extend them.
Finally, in Moorpark, which in 1986 became the last of the eastern Ventura County cities to pass growth-control laws, a recent court order exempting the city’s largest development from the law will on average more than double the annual number of new home permits now allowed, city records show.
More Curbs Sought
Voter discontent with the effect of current growth-control laws has spawned groups that are working on initiatives to restrict growth even further in Simi Valley and Moorpark.
But developers say that regardless of those numbers, growth-control measures are largely responsible for creating a market in which nearly half of the 2,486 new houses built and sold in the first half of the year were large, single-family homes with price tags of more than $300,000. The reason, builders said, is that they must pay a premium for land, which makes building of more affordable homes almost impossible.
“Affordable housing? There is not enough profit in it,” said Ron Golden, president of Continental Land Title Co. of Camarillo, the county’s largest title company. “The market will dictate the types of housing built.”
Golden, who is also president of the Ventura County Economic Development Assn., a lobbying group representing local business interests, said the bulk of the buyers are taking big profits on their original homes and using that money to buy larger, newer ones. Most of the new home buyers are from the county, he said.
“Ventura County used to be a first-time buyer marketplace and it’s turned into a move-up market,” Golden said.
The problem, say Golden and others in the development community, is that while builders try to fill demand for higher-priced housing, the lack of affordable housing for lower- and middle-income families will eventually create a shortage of workers to fill jobs in the county.
Lack of Workers
“New employers will not be able to locate here unless they can pay salaries high enough for people to afford to live here,” Golden said. “And if people are going to have to use 50% of their income for housing, that’s less money going into the economy to purchase other goods and services.”
To compound that problem, rental vacancy rates in the Conejo Valley are now a little more than 1%, Golden said.
The other problem looming for Ventura County homeowners is that eventually sales will cool off if first-time buyers can no longer afford to buy into the market so that others can move up the housing ladder.
“Not until there is a crisis are peoples’ attitudes going to change,” said Elaine Freeman, a vice president of Calabasas-based Griffin Homes. “It’s going to happen when people start saying, ‘I can’t afford to live here, my kids can’t afford to live here,’ and when employers can’t find employees who can afford to live here.”
The answer--builders, elected officials and growth-control supporters agree--is to find permanent solutions to problems such as traffic and air pollution that are associated with growth and new housing.
“People are probably willing to put up with temporary inconvenience, heavy traffic and crowded classrooms if they know there is a plan,” Edwards said.
But so far, neither developers--who must help pay for road improvement, school expansion and fire stations--elected officials or residents have come up with such a plan.
Outcome of Suits
A partial solution may come from court battles in the next few years, say local building industry officials, when growth-control laws in Thousand Oaks, Moorpark and Camarillo expire. The Building Industry Assn., which recently settled its suit against Camarillo’s growth law and is still suing Moorpark over its law, is likely to force cities to prove in court the need for extending growth-control laws, association members said.
The county Board of Supervisors has so far resisted pressure to open up most of the available land in its unincorporated areas to development. While large-scale housing projects on the Jordan and Ahmanson ranches on the east end of the county may begin to chip away at that policy, the supervisors say they recognize the strong resistance by constituents to development of the county’s agricultural and other open land.
“I continue to hear the same things from the building industry that I heard 10 years ago when I first ran for the Thousand Oaks City Council,” said Supervisor Madge Schaefer, who represents the east end of the county. “And sure, there are those in some groups that are selfish and have a pull-up-the-ladder-I’m-on-board attitude. But we can’t meet the housing needs of everyone who wants to live here; it’s not possible nor should we have the responsibility to house everyone.”
HOME VALUES IN VENTURA COUNTY Highest Median Home Prices: 2nd Qtr. 1968 1. Orange Co. $204,000 2. Honolulu $198,700 3. San Francisco $196,300 4. Ventura Co. $193,394 5. New York Metropolitan $191,900 6. Boston $182,000 7. Los Angeles $175,600 8. Hartford, Conn. $169,000 9. San Diego $142,500 10. Washington D.C. $131,600 Highest Appreciation Rate: 2nd Qtr. 1988 Over 2nd Qtr. 1987 1. Ventura County 22.4% 2. Orange Co. 20.1% 3. Los Angeles 19.1% 4. San Francisco 15.5% 5. Washington, D.C. 14.4% 6. Buffalo/Niagara Falls, N.Y. 14.1% 7. Baltimore 13.7% 8. San Diego 12.1% 9. Seattle/Tacoma 11.2% 10. Syracuse, N.Y. 10% Source: National Assn. of Realtores Los Angeles Times