Real O.C. Boom Was in the ‘60s : Growth: The number of houses built in the decade was up 76% to 232,379 from 132,193 units constructed in the 1950s.


The 1980s will forever be known as an era of an Orange County building boom. Yet that characterization is more myth than fact when it comes to residential real estate.

According to U.S Census Bureau statistics released today, 198,791 owner-occupied and rental housing units were built from 1980 through March of 1990--down 24% from the 263,043 units built during the 1970s.

If any decade deserves being called the decade of the building explosion, it is the 1960s, when the number of houses built rocketed 76% to 232,379 from 132,193 in the 1950s.

So, will the decline in the 1980s leave us with a housing shortage in the decade ahead?


Not at all. Housing has kept pace with population growth in Orange County.

While the county grew 24% in the 1980s to 2,391,968, the total number of housing units increased 29% to 857,072. That incline in housing units wasn’t nearly as steep as it was in prior decades: 64% during the 1970s; 128% during the 1960s, and a whopping 171% during the 1950s.

But then, the population here increased a lot more dramatically in previous decades, too: jumping 225% from 1950’s 216,224 to 703,925 in 1960, and then doubling by 1970 to 1,409,359.

Unlike commercial real estate developers, home and apartment builders have done a pretty good job of staying in line with the number of buyers and renters available for their products.


“Home builders study the market very closely,” said Christine Diemer, executive director of the Orange County Building Industry Assn. “They need 18 months to build a house, with the intention of selling the end product immediately.”

New unsold houses in Orange County totaled 1,207 units in the first quarter of 1992, according to the Meyers Group, a Newport Beach real estate consulting firm. The firm does not track the number of used homes on the market.

UC Irvine economist David Brownstone pointed out that land has become scarcer for new housing developments in Orange County. “You don’t find these huge areas of unbuilt land that were here in the ‘50s and ‘60s,” he said.

Apartment building, too, closely tracked population growth. In 1980, there were 267,229 renter-occupied units, a figure that climbed 23% to 329,257 in 1990.

Vacancy rates for apartments currently stand at about 6% in the county, said Richard Lambros, spokesman for the Apartment Assn. of Orange County. “That’s all right, though we like to see it under 5%,” he said.

As Orange County became an increasingly popular place for young professionals to live in the early 1980s, apartment vacancy rates hovered at only 2%--creating a landlord’s market. “That’s why we saw rents increase so much in the 1980s,” Lambros said. In 1990, the county’s median rent was $790, up 39% from $569 in 1980--a figure adjusted for inflation.

Higher rents have led to higher vacancy rates, Lambros said: “More people are doubling up with roommates now in order to afford the rents, and more are moving back home with their parents.”

However, homeowners suffered the rising cost of housing more than renters. The median monthly mortgage here in 1990 was $1,317, up 67% from 1980s’ inflation-adjusted $789.


“In the 1960s and 1970s, we had mostly starter homes in Orange County,” said UCI professor Brownstone, who has done studies on housing. “The population growth was mainly due to middle-income people commuting to jobs in Los Angeles, where houses were more expensive.

“But as Orange County developed its own employment base, houses here became more expensive,” Brownstone said. “Especially in South County, most of the houses built in the 1980s were move-up houses--bigger, fancier, with wealthier people living in them.” Mortgage statistics don’t take into account that many homeowners today are paying for houses with more amenities than the standard starter home, said mortgage broker Randy Brusca, owner of Assured Home Loans in Tustin. “The product available to the consumer is the best it’s ever been,” he said.

Yet that higher quality product is unaffordable for many people, pricing out first-time buyers and many would-be move-up buyers. “A lot of houses built here today start at $350,000,” Brusca said. “People’s salaries have not increased at the rate house payments have increased.”

Mortgages vary widely. In 1990, 11,612 lucky folks--who probably bought their homes well before the 1980s--paid less than $300 a month in mortgage fees. And the monthly payments of 32,973 people fell between $300 and $499; 27,508 paid $500 to $699, and 45,456 paid $700 to $999.

But the bulk of Orange County homeowners--99,337--paid $1,000 to $1,499. Another 70,222 paid $1,500 to $1,999, and an astounding 72,588 paid $2,000 or more each month on their mortgage.

Diemer blamed higher home costs partially on tax-slashing Proposition 13, which left developers picking up infrastructure costs, such as road fees once covered by state funds. “The new home buyer ultimately ends up paying those fees,” she said.

The Housing Quotient

If Orange County had a signature business during the 1980s, it was real estate development--more to the point, home-building. The housing market here changed in some dramatic ways.


More Income Goes Into Housing

While a plurality of homeowners still spend less than 20% of their income on housing, the percentage doing so declined precipitously from 10 years earlier. County renters also lost ground in the less-than-20% category. State changes were similar to the county’s.

Homeowner income spent on housing Less than 20 percent: 41.9% 20 to 24 percent: 12.8% 25 to 29 percent: 11.9% 30 to 34 percent: 9.2% 35 percent or more: 23.6% Not computed: 0.6% Tenant income spent on rent

Less than 20 percent: 21.8% 20 to 24 percent: 15.8% 25 to 29 percent: 13.7% 30 to 34 percent: 10.0% 35 percent or more: 35.8% Not computed: 2.9% Homeowners paying less than 20% of income for housing

1979: 54.8%

1989: 41.9%

Tenants paying less than 20% of income for rent

1979: 27.9%

1989: 21.8%

NOTE: Homeowner costs include mortgages, taxes, association fees and other expenses. Pricey Housing

The county’s median mortgage cost increased by two-thirds between 1980 and 1990, the median rent by 39%. Figures are adjusted for inflation.

1980 1990 Mortgage $789 $1,317 Rent $569 $790

Building Boom Cools

The percentage of county housing stock built in the past decade matched the statewide rate for the first time since the 1960s.

Year homes built Orange County California 1939 or earlier 2.7% 10.7% 1940 to 1949 2.9% 9.1% 1950 to 1959 15.1% 17.3% 1960 to 1969 26.6% 18.4% 1970 to 1979 30.1% 21.7% 1980 to March 1990 22.7% 22.9%

Bedrooms for Two, Three

Most homes have two or three bedrooms, a configuration matching the statewide pattern.

Bedrooms: % OC

None: 3.2%

One: 16.3%

Two: 30.4%

Three: 29.2%

Four: 17.5%

Five or more: 3.4%

Source: U.S. Census Bureau