Home Costs Closing Out Workers, Developers Say
They should have been all but salivating at the sight of vast stretches of vacant land, ripe for development of new office buildings and manufacturing plants and handy to the Ventura Freeway.
But the six busloads of commercial real estate brokers and industrial park developers traveling Thursday between the San Fernando and Conejo valleys were wishing that some of the empty lots were zoned for homes--not offices.
The 200 builders and brokers aboard buses chartered by a business group called the Technology Corridor Assn. were told that a severe shortage of affordable housing threatens to cloud the sunny future of commercial development in the 26-mile-long strip between Woodland Hills and Newbury Park.
“The No. 1 problem is housing prices,” warned Paul Garrity, a commercial development expert from the accounting firm of Peat Marwick Main, whose remarks set the tone for the tour.
“Less than 50% of the jobs being created in the Technology Corridor are being filled by people in the community. There’s a lot of reverse commuting going on,” he said, as workers commute from the cheaper living areas of the inner city to jobs in the farthest suburbs, where they cannot afford to live.
Garrity said low-cost housing being constructed in the Palmdale area is becoming a threat to industrial areas such as the Ventura Freeway corridor. “They will draw jobs out there,” he warned. “If you think you’re going to attract clerical workers to Thousand Oaks, think again.”
Displaying a chart that showed the price of the average Conejo Valley home has jumped from about $200,000 in 1986 to about $445,000 today, he added, “This is the picture that will scare an audience of employers out of their seats.”
The employment statistic contradicted the predictions of some corridor developers, who won permission to build offices and manufacturing plants in places such as Agoura Hills and Thousand Oaks by promising local authorities that their projects would provide jobs for local residents.
As a result, nearly 17 million square feet of office and industrial space has popped up along the freeway corridor--most of it in the past five years. Hundreds of thousands of additional square feet are under construction.
During Thursday’s four-hour bus tour, the development experts were shown building after building bearing “for lease” signs. But they were also shown dozens of newly completed structures that have been snapped up by major firms--some of whom have signed rental contracts at $30 per square foot.
Tired of Commute
Some of the leases have been negotiated with Los Angeles-based companies whose executives live in Calabasas Park, Westlake Village and Thousand Oaks and are tired of their own daily commute, Technology Corridor officials said.
As if to prove that point, when the tour stopped for lunch, commercial real estate broker Hal Cook of Cushman and Wakefield rushed to a pay phone to call a client in Irwindale. “He’s interested in moving out here because his manager lives out here and there’s a good availability of space,” Cook explained.
“Executives at firms that locate out here definitely live in the area,” said Ricardo Capretta, vice president of development for Katell Properties, which is completing a six-structure industrial park, the largest in Agoura Hills. “Employees live in places like Newbury Park, Camarillo and Oxnard.”
Other businesses that have relocated to the corridor “are pulling employees from the Westside and from Palmdale, where they’re commuting an hour and a half,” said tour member Randall Clark, associate director of Bear Stearns Real Estate Group in Century City.
“Housing is not a problem now. But affordability will be an issue in the near future.”
But the high cost of raw land means there is little likelihood that low-income housing is in the cards for the corridor, said residential developer Philip E. Yasskin, president of JM Peters Co.’s Los Angeles/Ventura division.
Yasskin said workers at his Westlake Village-based construction firm, who work on $500,000 homes in the corridor, commute from as far away as Lancaster and San Bernardino-Riverside. “There has to be a place for people to live and make a living or else people will move and business will leave,” Yasskin said during the tour’s lunch break.
Future Problems
Technology Corridor Assn. President Steve Valenziano agreed.
“In the long term, if we don’t solve the housing situation, you look 10 or 15 years down the line and you have a Santa Barbara situation out here with a bunch of old retired people living together,” said Valenziano, vice president of Faulkner Co., a commercial realty firm.
Valenziano said the 65-firm corridor association is apolitical. But he indicated that its members might be receptive to revising city and county master plans that have long sought to line the freeway corridor with commercial and industrial development.
Planners for the cities and for Los Angeles County have tried to avoid problems found in the Valley by clustering commercial developments next to the freeway as a buffer between the noisy highway and nearby neighborhoods of single-family homes.
Valenziano said it might be possible to mix apartments or other forms of affordable housing among offices and industrial parks along the freeway corridor.
“If you could get government entities to subsidize that kind of move and set up tax incentives for developers, that would be one solution,” he said after the tour.
“Economically, if it could be rezoned to something else, I think there would be support for it.”
