Builders Launch Drive to Combat Curbs on Growth
The trade group that represents nearly 7,000 California home builders and others in the housing industry has launched a $5-million program aimed at curbing the slow-growth movement and defeating a possible ballot measure that would limit growth statewide.
Realtors, lenders and others involved in the real estate industry are also expected to join the program, which was started with little fanfare a few months ago by the influential California Building Industry Assn.
The builders hope to eventually assemble a broad-based coalition of business, civic and ethnic groups to encourage more growth and promote the positive aspects of home building.
While formation of the so-called “Save Our State” program--nicknamed S.O.S.--is the builder group’s most ambitious attempt to address growth issues on a statewide basis, it is not the only tool it hopes will stem the slow-growth movement in California.
Builders meeting here for the recent Pacific Coast Builders Conference hope that a transportation program sewn together by state lawmakers will ease California’s worsening traffic problems, which developers claim is the No. 1 cause of most growth-control initiatives.
And on the local level, many individual builders are launching public-relations programs to defuse opposition to their projects or suing when they feel they have been shortchanged.
“We don’t want the public to think that we’re the bad guys in the black hats,” said George Cook, the California Building Industry Assn.’s executive officer. “We want to show people that growth and development is good, not bad.”
Although the builders’ new Save Our State program is still in its embryonic stages, the trade group has already produced a 10-minute, $20,000 video that depicts a television newscast the day after passage of a fictitious statewide slow-growth measure.
The slick video features two former journalists--including Tiiu Leek, formerly of Channel 5 in Los Angeles--anchoring the simulated newscast and alternately switching to field correspondents in different parts of the country.
A reporter in Houston talks about the near-depression Texas suffered when the energy business collapsed in the early 1980s, while another reporter in Massachusetts talks about the economic devastation caused by the collapse of the textile business in the 1960s.
“The inference is clear: If housing gets stopped in California, our economy is headed for real trouble,” said Ken Becker, who works for the Costa Mesa-based public-relations firm that helped to put the tape together.
Becker said the tape has already been shown to hundreds of builders and other businesspeople in an effort to garner more support for the program and raise the estimated $5 million it will take for builders to get their pro-growth message across to the public.
Builders plan to run television commercials, hire a celebrity spokesperson, sponsor special events and improve their media-relations program.
Need for Allies
The ability of builders to form a coalition of various civic, business and ethnic groups to promote growth could be the make-or-break factor behind the pro-growth program’s success, experts say.
Recent balloting trends show that the public tends to vote for growth-control measures when builders are seen as the sole opponents. But voters are much more likely to reject controls when a variety of groups oppose the ballot measure.
“The broader coalition they build, the better off they’ll be,” said Bill Lawrence, an executive in the Los Angeles office of real estate consultants Kenneth Leventhal & Co.
“Builders won’t generate much sympathy--regardless of whether they’re correct--if they just come across (to the public) as self-interested land rapers. And to a degree, that’s how they have came across in the past.”
Such a coalition will be needed, builders say, if they are to fend off a possible statewide slow-growth measure. Although no such measure is currently in the works, developers fret that such a proposal could be put before California voters in the early 1990s.
Transportation Funding
Builders also hope that an agreement on a transportation program hammered out a few weeks ago by negotiators for the Legislature and Gov. George Deukmejian also will ease slow-growth pressures across California.
The pact calls for $18.5-billion to be spent over the next 10 years to improve roads, repair deteriorating freeways and enlarge mass-transit systems. The money would be raised through the sale of state-backed bonds and through increases in both the gasoline tax and truck-weight fees.
The program is designed to cut urban congestion, a key contributor to the slow-growth movement.
“If we don’t take the initiative and pass a comprehensive transportation program, the voters will do it for us (by approving slow-growth initiatives) at the ballot box,” said Assemblyman Richard Katz (D-Sylmar), chairman of the Assembly Transportation Committee.
Builders see another benefit to this proposal and others designed to reduce congestion: Their passage could put downward pressure on the fees that developers now must pay to build roads, schools and other items near their new housing tracts.
Such fees can top $10,000 for each new home in a development.
Gann Spending Limit
“The public would be shouldering a fairer share of paying for roads,” said Don V. Collin, a builder lobbyist. “Everybody uses the roads, so everybody should pay for them--not just builders and new home buyers.”
Still, the proposal that Katz and his colleagues reached with the governor’s negotiators has a few obstacles remaining in its path. The two biggest: Voters would have to significantly alter the Gann state spending limit and also approve $3.5 billion in bond sales.
While the plan is the most far-reaching transportation program the Legislature has contemplated in more than two decades, Assemblywoman Delaine Eastin (D-Fremont) is formulating a bill that could have an even greater impact on statewide growth.
Eastin’s plan would set a jobs-to-housing ratio for every area of the state. The bill would provide incentives to local governments that encourage the development of communities with a good balance of both homes and jobs.
Many urban planners say such ratios would enable people to work close to home, thus easing traffic congestion, cutting down on smog and curing other problems caused by a commuter-oriented society.
Soothing Homeowners
While lawmakers work on long-range solutions to ease the state’s growth problems, builders are adopting a variety of strategies to cope with growth concerns in their own neighborhoods today.
Los Angeles-based American Beauty Homes, like many other builders, recently hired two full-time public-affairs experts to meet with homeowner groups in areas where it wants to build. The company also employs several part-time consultants.
“We try to iron out all the community’s concerns first, before we go the city and ask for permission to build,” said Jack Shine, American Beauty’s chairman.
Paying Premium Prices
Indeed, whether they’re known as public-affairs specialists, consultants or community-relations experts, people who know how to soothe the nerves of homeowners can make big money working for builders.
A recent job opportunity survey conducted by the executive search firm of Korn/Ferry International said demand for community-relations specialists in the real estate business is outstripping supply.
Other companies are paying premium prices for properties whose current owners have already received approval to build a certain number of homes.
“That way, you don’t have as many headaches because most of your approvals are already in place,” said Jim Montgomery, director of land development for Irvine-based Barratt American Inc. “Your pre-development time is cut way down because you’re automatically entitled to build a certain number of units.”
Going to Court
However, Montgomery said, such a convenience is not cheap. A parcel with most of its approvals in place can cost 50% more than an identical parcel without approvals.
Some builders who feel unfairly treated by local growth-control ordinances or city officials have also become more willing to seek relief in the courts.
Two builders in Orange County, for example, sued the Newport-Mesa Unified School District last year over fees the district has been charging developers. Although the fees did not exceed state-set limits, the builders felt the district was charging more than it really needed to run its educational programs.
A Superior Court judge ruled against the district and recently ordered it to refund the $523,000 it had collected from the builders and two local homeowners.
The ruling was the latest in a string of decisions that has made it tougher for municipalities to levy certain types of fees on builders and harder for slow-growth advocates to stop planned projects.
“Builders aren’t exactly lining up to go to court, but they now have a little more legal ammunition if they decide that it’s the only thing left for them to do,” said Ken Bley, a partner in the Los Angeles office of attorneys Cox, Castle & Nicholson.
