Housing Boom’s End Hits Home in Antelope Valley : Development: Recent buyers feel angry and betrayed after builders abandon dozens of partly completed, sometimes partly sold tracts.
In the fall of 1989, near the peak of what was then a booming housing market in the Antelope Valley, Tim and Cindy Wagner happily bought their first new home in Lancaster, paying about $135,000 for a spacious two-story model on a cul-de-sac near the local elementary school.
Today, nearly two years later, the developer who built the Wagners’ house is out of business, leaving them to fix scores of flaws, including a leaky roof and a cracked driveway. Their neighborhood is dotted with unsold houses, mud and water fill street gutters, and a dense thicket of 5-foot-high tumbleweeds lines the tract.
Welcome to housing limbo in the Antelope Valley.
Stung by last year’s recession and a nose-dive in housing sales and construction, developers have abandoned dozens of partly completed, sometimes partly sold housing tracts in the high desert, leaving recent buyers feeling angry and betrayed.
In Lancaster in particular, builders, especially smaller companies, have closed down, sometimes leaving owners no recourse on home warranties. The city won’t sweep the streets or maintain street landscaping until a tract’s roads are completed and meet all city standards.
“You have enough stress in your life without paying a lot of money and having something like this happen,” said Tim Wagner, a Rockwell Corp. aerospace worker who had complained to the city, the state contractors board and others to no avail.
Meanwhile, in Palmdale, hundreds of home lots sit abandoned, waiting for the economy to turn. Some lots are just graded dirt, others have concrete foundations only. Some have wood frames but no stucco.
Residents complain that some of the abandoned areas have become eyesores, serving as convenient places to dump trash. Vandals throw rocks through windows and steal fixtures from unfinished homes. And crops of tumbleweeds flourish on untended land.
The troubled tracts mark the downfall, at least temporarily, of Los Angeles County’s largest new home market. After several years of frantic building and buying, it finally overheated by early 1990 as prices spiraled, profit-hungry developers overbuilt and the recession hit.
In recent months, housing auctions have become common as lending institutions have forced builders to unload unsold homes. Families that bought new homes for $250,000 suddenly find their developer selling the same model for $50,000 less.
Last week, the Lancaster City Council began wrestling with the problem, endorsing an effort to at least get the streets, landscaping and other public works improvements completed in occupied tracts such as the Wagners’, and adopting a new policy aimed at preventing such problems in the future.
Amid mounting complaints, the council endorsed city efforts to foreclose on performance bonds--a type of financial insurance--posted by developers at some 26 tracts. Since most of the tracts’ builders are no longer in business, the city will try to get the developers’ bonding companies to pay for the unfinished work.
According to city records, those include cases in which the developers never installed required landscaping around the perimeter of their projects, failed to pave or widen streets properly, dumped construction debris, didn’t install street signs or lighting and left broken sidewalks.
Jeff Long, Lancaster’s director of public works, estimated there is up to $3 million worth of unfinished infrastructure work spread among the 26 tracts, which are backed by $14 million in bonds. And although the city has been trying since July to get the bonding companies to step in, no work had been done as of last week.
Long said the companies have been working with the city, but he still said it may take a year to complete the work because cashing in on bonds is a complex, time-consuming process. However, the bonds cover only the public-works aspects of the projects. They do not cover problems with already purchased homes or guarantee that the tracts themselves will be finished.
In addition, the council voted 3-2 on Tuesday for a new policy requiring developers in the future to complete infrastructure work in any phase of a tract before selling those homes. In the past, the city allowed developers to postpone some of that work until near the end of an entire project.
“How ‘bout the citizens out there who have to put up with all this junk,” complained Councilman Arnie Rodio, who proposed the change that was supported by Councilmen George Root and Bill Pursley. Mayor Henry Hearns and Councilman George Theophanis opposed the new policy as too stringent.
It has sparked protests from leaders of the Antelope Valley’s chapter of the Building Industry Assn., which represents developers, who claim that the policy is too onerous. They plan to discuss it with city officials this week.
“We still have a problem with it,” said Andrew Eliopulos, president of the builders group. Eliopulos added that he was especially angry that the city didn’t first consult his group before making the change. But Eliopulos also said he has sympathy for the troubled home buyers.
“There were a lot of builders out there who didn’t belong in this business in the first place,” Eliopulos said. “As a buyer, I would be upset. I’d be discouraged. But we can’t control what a builder’s going to do with his tract.”
Of the 26 projects on Lancaster’s list, nine, including the tract where the Wagners live, were built by now-defunct Hillside Residential Inc., a Lancaster developer that laid off all of its employees and closed its local office early this year. Banks have been foreclosing on many of its holdings.
“We got stuck in the crunch like everybody else did,” said Mary, a former Hillside sales manager who refused to give her last name. Hillside built some 15 tracts in the area since the early 1980s before its money ran out, although the company has not filed for bankruptcy, she said.
Residents in the company’s tracts, most of which are at least partly occupied, complain of shoddy workmanship and repairs left undone because of the developer’s demise. But the buyers appear to have little recourse. Asked what they might do, Mary said, “I have absolutely no idea.”
The Wagners and other residents in the Ivy League tract on the west side of Lancaster have won Small Claims Court cases against the developer. The Wagners said they won a $5,000 judgment as reimbursement for repairs and got liens placed on Hillside’s property holdings. But thus far they haven’t collected any money.
The Wagners figure they have done at least $11,000 worth of repairs to their house, making most of them by themselves to save money. But that hasn’t solved the problems with perimeter landscaping, drainage and poor paving in the area. “You can see this whole tract looks terrible,” Tim Wagner said.
So for their second anniversary in the house next month, the couple figure they will be pressing the city to speed up the bond work and perhaps filing another claim against the developer.
Meanwhile, Wagner wondered why home buyers aren’t better protected. “Something should be done,” he said.
