L.A.’s Housing Finds an Oasis in Antelope Valley : Real estate: The open spaces around Lancaster and Palmdale are witnessing a home-building boom, with new home prices averaging $100,000 less than in the San Fernando Valley.
Quick. Guess which county in Southern California had the biggest increase in construction of single-family homes last year. Riverside? Wrong. San Bernardino? Nope. Orange? Wrong again.
It was Los Angeles County. You know, that smoggy, congested, overdeveloped, high-priced place where nobody wants to live anymore. In 1989, according to permit records, 23,449 single-family houses were begun in the county, a whopping 30% rise from 1988 and the highest total in at least 15 years.
Meantime, Orange County single-family housing starts fell 30% to slightly more than 8,000, San Bernardino rose 11% to 16,142, Riverside tumbled 26% to 22,000 and San Diego was down 25.8% to 10,951.
Virtually all of last year’s increase for Los Angeles County is represented by growth in the Antelope Valley, one of the hottest home-building areas in the nation. In the once-remote open spaces around Palmdale and Lancaster, 11,341 new single-family homes were started in 1989, up more than 90% from 1988. The only other major area that had that magnitude of increase in home building was the Victor Valley in the high desert, where single-family housing starts rose more than 123% to 2,364 in 1989.
“The Antelope Valley is becoming the classic Southern California bedroom community of the 1990s,” said Robert Gardner, a partner in the Los Angeles real estate consulting firm of Robert Charles Lesser & Co. “It’s what the San Fernando Valley was 20 or 30 years ago.”
Added Ben Bartolotto, research director of the Construction Industry Research Board in Burbank: “The rest of Los Angeles County has become prohibitive for new housing, except for the most expensive homes. Antelope Valley is still considered inexpensive.”
To some extent, the figures for last year are an anomaly. Many projects begun in the Antelope Valley in 1989 might have been started even earlier, but local government planning and permit agencies were swamped by the sudden surge. And, at the same time, places such as Riverside, which have seen enormous growth in the past half decade, put the brakes on development last year to better manage their growth.
Palmdale and Lancaster “weren’t capable of processing all the permits, and their staffs had to gear up and become more sophisticated in the way they deal with development. And that took time,” said Mike Azeka, executive vice president of Azeka, De Almeida Planning, a Costa Mesa land-use consulting firm.
But even if the huge percentage increase of 1989 is not sustainable, growth in the Antelope Valley should continue at a breakneck pace, Azeka believes, and the reason is simple. Prices for an equivalent home there are at least $100,000 cheaper than in the much more developed San Fernando Valley next door.
According to the California Assn. of Realtors, the median price of a home (new or existing) sold in the Los Angeles area in 1989 was $215,472. That compares to the average $155,000 cost of a new home in Antelope Valley last year.
Regional planners seem convinced that the recent growth in Antelope Valley will continue. Forecasts done by the Southern California Assn. of Governments show that population in the Palmdale-Lancaster area is expected to increase to 529,600 by 2010, up 217% from 1987. Even more startling, SCAG predicts that the number of housing units in the Antelope Valley will increase by 265% to 222,600 in the same period.
Unlike many other areas of Southern California where development controls and soaring land prices have slowed the pace of housing construction, the Antelope Valley is still viewed as pro-development by major construction companies, and land is still relatively cheap.
Azeka estimates that the typical price of an acre of undeveloped land in Antelope Valley in the past two years has soared from under $10,000 to between $30,000 and $80,000. But that is still less than half the price fetched by the remaining undeveloped land elsewhere in Los Angeles County, he says.
The combination of relatively cheap land and the pro-development attitude of local officials has lured many of the nation’s largest home builders to the Antelope Valley. Such well-known companies as Kaufman & Broad, Larwin, Pardee and Griffin are very active in the area.
And they are erecting huge subdivisions and master-planned communities in sizes unseen in most of Los Angeles County for 20 years or more. Some tracts under construction will contain as many as 2,500 homes, Azeka says, although the more typical subdivision is 30 to 100 homes.
Ironically, while single-family home construction showed a big rise in Los Angeles County last year--thanks almost entirely to the Antelope Valley--construction of multifamily units continued to slump. Some planners worry that lagging construction of apartments will worsen the already-critical housing shortage in the area.
Statistics show that 24,786 multifamily units were begun in the county last year, down 23.7% from 1988. The trend was regional: Orange County multifamily housing construction was down 28%, Riverside/San Bernardino were off 27% and San Diego fell 43%.
Experts say changes in the Tax Reform of Act of 1986 made investing in apartment construction less profitable, and that has slowed the pace of construction. Others say rent control laws and the long permit process have cooled the interest of some apartment investors.
But others say it is easy to understand why single-family housing in Los Angeles County surged last year while multifamily housing construction continued in the doldrums. “Everybody still wants a single-family house,” Azeka said. “It’s the Southern California dream.”
Some are concerned that the huge number of new homes being built in the Antelope Valley will hit the market just as evidence suggests that home sales are soft. After a breathtaking run-up over the past five years, prices on most Southern California homes have leveled off and are even dropping in some areas.
New homes in some subdivisions have been on the market for months without takers. But experts note that those are mostly in high-priced developments. So-called low-end homes--those that sell for less than the median price in the region--are still going quickly. And that, they say, augurs well for communities such as Antelope Valley as long as prices there remain relatively low.
Said Chris Taylor, manager of economics and market analysis at the California Assn. of Realtors: “People are flocking to the more affordable fringe areas of the Los Angeles Basin. All the numbers show that affordable houses are still in very strong demand.”
