Living on the Edge : Some Cliff Dwellers With a View : Can Also Have That Sinking Feeling

When David W. Peter stands on the deck of his home at the end of Via Columbo in San Clemente, he looks out on a panorama of green, roller-coaster hillsides and blue ocean.

But when he looks down, he’s peering into a sheer 25-foot drop that cascades through a steep canyon. Eight years ago, before a major slide hit, a big chunk of the back yard was there.

That’s all just history to Peter now. After spending 5 years and a good deal of money anchoring the house with 11 caissons--cement-filled posts planted 25 to 65 feet deep--and laying in an elaborate water-drainage system, he says he is confident it will stay put.

Not so confident, however, is Gary Jasper, who lives in a two-bedroom, 2,500-square-foot home just a few miles from Peter on the bluffs overlooking Capistrano Beach. If Jasper doesn’t act fairly quickly, he may soon be marveling at sunsets from the beach instead of from his cliff-top perch.

For many residents of south Orange County, a home with a view--especially if it encompasses the Pacific Ocean and a picture-postcard coastline that rivals the Cote d’Azure--is the ultimate and worth every penny to buy, build or restore.

These homes and the property they sit on also rank among the most expensive in the state. White-water view lots in Laguna Beach or Dana Point start at $800,000, according to Brion S. Jeannette, a Newport Beach architect who specializes in building ocean-view cliffhangers. And, he said, construction on them can be astronomically higher than building a comparable home on flat parcels inland (up to $200,000 more just for a foundation).

A good example is the pink Italian villa he is building on Camel Point next to Aliso Pier in Laguna Beach for Severin Wunderman, head of the Wunderman Group of companies, which makes and markets Gucci watches.

The cost of the 14,000-square-foot, three-story structure with adjacent guest house is an estimated $2.25 million.

With waves crashing 50 feet below, the house is anchored with caissons and will be coated with a special water-resistant material that looks like stucco. All the rain water will be contained and diverted via a sump pump to Coast Highway.

Jeannette figures that if the house would have been built inland, the owner could have saved $250,000 alone in concrete foundation costs. But for owners of homes like these and others that Jeannette has built in the coastal areas, cost-cutting usually isn’t an issue.

“If (the clients) can afford the property, they can afford the risks that go with it,” he said.

Jasper bought his Capistrano Beach house 10 years ago to get away from the increasingly congested freeways in the central county and to be closer to his beloved ocean. Before he started his masonry company, he had a commercial fishing business and is still an avid angler.

High on his list of sweet pleasures is coming home at the end of a day, coddling a Scotch and water and watching the sun disappear into the Pacific.

But a few months ago, Jasper noticed a series of deep cracks in his back patio. He called in a geologist, who gave him the bad news. A hidden sprinkler system installed by the previous owners and camouflaged by brush over the years had speeded erosion. The water was accompanied by burrowing opossums and rats that turned the hillside into something resembling a slab of Swiss cheese. This all meant that the sandstone cliffs were slipping down the hill and unless Jasper did something to shore his up, the house would go with them.

The solution won’t be simple, Jasper said, or cheap. If he reinforces the lot with caissons--an engineering technique that he figures should have been used 14 years ago when the house was built--he will have to rip out about a third of his house just to make a passageway for the heavy machinery. The patio must also be demolished and rebuilt so that it is cantilevered out about 15 feet over the edge. He has even considered tearing the house down and starting over to make sure it is finally built the way it should have been to stay anchored in place.

Despite his dilemma, Jasper has no regrets about buying the house and is surprisingly matter-of-fact about the situation.

Look at it this way, he said with a grin, “I will have one hell of a nice patio when it’s done.”

Just a few blocks away on Palisades Drive, the Hall family lives in a huge cement and teak home built in 1981 that still stands out like some shrine to modern architecture. Anchored with no less than 34 caissons into the edge of a sandstone bluff, it is framed with thick slabs of concrete and is as solid as “you can get in California,” Bill Hall said. He notes that it was built to commercial, not residential, standards. That is one reason that Hall, a real estate developer, isn’t worried about the geologist’s report that estimates that the Capistrano bluffs are disappearing to erosion at the rate of 1/4-inch a year.

Surrounding the five-bedroom, five-bath home, which features a sauna, steam bath and personal gym, is a drainage system that diverts excess water back to the street and away from the slope where it could do major damage.

Real estate broker Sharon Bryant, who is part owner of White Water Realty, grew up on the Capistrano bluffs. She handles a lot of sales of ocean-view properties, including those on the bluffs, and shrugs off suggestions that an inordinate amount of “For Sale” signs seem to be stuck in front of houses along this 2 1/2-mile stretch. Sales have been brisk the past few months, she said, adding that turnaround time is about 4 months for these homes that start at $600,000 for a fixer-upper and climb to $1.5 million. Some, she said, sell in less than a week--despite the fact that some banks and savings and loans are reluctant to issue loans on property that has geological problems.

Getting insurance for these cliffhangers is no different from insuring a comparable house built in the flatlands, said State Farm Insurance agent Mike Miller of San Juan Capistrano. But besides the standard fire and theft, a homeowner would be hard-pressed to find any insurer to cover mud flows, underground springs, damage from another sliding house and land movement. Homeowners can get earthquake insurance, but it comes at a steep premium.

Western Insurance Information Service, a Tustin-based consumer-information company that tracks the insurance industry, said that although some homeowners have won lawsuits requiring their insurer to pay for structural damage to a house that slips down a hill, no company sells policies to cover mudslides.

Financial or insurance headaches aside, though, there is never a shortage of people who want to snatch up these view homes, even in slow real estate markets, cracked foundations or no, Bryant said.

Unlike most people who can’t wait to get rid of a house once it starts to slip off its foundations--and there have been plenty of those in San Clemente--David Peter bought his two-story, four-bedroom house 8 years ago after a slide took the back yard and left some of his neighbors’ homes tilting 6 inches toward the slope. The house next door was in such bad shape, it was razed.

“I’m the crazy man who lives on the slide,” Peter joked.

But 8 years ago, Peter saw a house that posed both a professional challenge and a good financial deal. He heads a group of geologists, contractors and consultants who specialize in rescuing distressed houses, most of them damaged by slides much like the Via Columbo house. If anybody could make the house livable again, Peter figured he could.

“We put our money where our mouth is.”

He thought the house, built in the early ‘60s, was a good risk because the portion of landfill upon which it perched had slid about as much as it was going to. With the right precautions, the house could be made solid again, Peter surmised.

The former owners simply walked away from the house and quit paying on the loan. The bank was left holding the defaulted loan, so it hired Peter to compile a report on the house’s worth. Peter wound up arranging a trade of equity and land for the house. He also acquired the note on the vacant lot next door.

Other than acknowledging that he got the house for “less than $100,000,” Peter won’t say exactly how much he paid for it. However, homes in the area today sell for around $350,000.

Over the course of 5 years, Peter in his spare time installed caissons, built a retaining wall, put in a proper drainage system and reinforced the foundation. Probably the biggest test of his work occurred in the fall of 1987 in the middle of the night when the Whittier quake shook up a big portion of the county. Peter, awakened from a deep sleep, rushed to gather his wife and three children.

“In my mind’s eye when I got to the front door with all the kids, I fully expected to see half of the house hanging,” he said.

But it didn’t budge an inch.

And he doesn’t expect it to. His reputation, after all, is hanging on it.