Birtcher Returns to Home-Building Foundation : Construction: Family firm that started out in housing, then went commercial, names the president of its new residential unit, marking a return to its roots.

Birtcher, which got its start as a small, family-owned Santa Ana home builder and later became one of the largest commercial developers on the West Coast, has come full circle.

The Laguna Niguel developer said Tuesday that it has named former Kaufman & Broad executive Frank J. Scardina to head its new home-building unit, marking its return to its origins.

With land prices falling, Birtcher will try to build single-family houses in southern Orange County to sell for $175,000 to $225,000, what Scardina calls “the low end of the middle market.” Those are low prices for Orange County, which has some of the most expensive house prices in the nation.

Now half-owned by the Japanese trading concern Mitsui & Co. Ltd., Birtcher has been looking for ways to diversify from developing commercial buildings, a business that has nearly ground to a halt in the last year.

Birtcher had considered buying a home-building company--and took a look at several acquisition candidates--but eventually rejected that approach as too expensive and fraught withproblems.

The home-building industry went into the tank last year too, and many builders are loaded with unsold houses and financial problems. A number are reported to be for sale.

Among the builders Birtcher looked over were Homestead Land Development Corp. and GlenFed Development Corp., both owned by thrifts.

The company also talked to Kathryn G. Thompson Development Co. in Aliso Viejo.

Scardina resigned in December as president of Kaufman & Broad’s Coastal Valleys Division, which builds homes in western Los Angeles County and in Santa Barbara and Ventura counties. Kaufman & Broad is the state’s largest home builder.

Scardina, 43, said he left to spend some time with his family and was considering starting a home-building company when Birtcher contacted him.

Even financially healthy home builders are having trouble borrowing money to build because banks have curtailed their real estate lending.

But Mitsui, the world’s largest trading company, gives the fledgling home builder enough financial muscle to buy land and build houses.

Japanese investors are turning increasingly to building homes in the United States, experts say, because home building offers a quicker financial return than buying and holding big office buildings--once the favored vehicle of these investors.

And home sales seem to be turning up slightly while the bottom falls out of the overbuilt office market.

The new home-building operation will create more work for Birtcher’s under-utilizedconstruction unit.

Birtcher expects that with the savings and loan industry out of the commercial real estate lending business and banks cutting back on loans to builders, the small home builders who construct a majority of Southern California’s housing will have trouble borrowing, said Michael H. Voss, Birtcher president. That means the supply of new homes will be tight and profits good for those who can find the wherewithal to build, said Voss.

The company will attempt to build three to four neighborhoods of new houses in the next year in Orange County and elsewhere in Southern California.

Ultimately the new home builder’s market may extend even to Japan. In partnership with Mitsui, which is also Japan’s largest real estate developer, Birtcher is demonstrating American wood frame construction methods in Japan. It could turn out to be a huge market, Voss said, because of Japan’s strong economic growth.