Cracks Warned of Disaster for Dream Homes : Slides: Anaheim Hills residents watched in despair as rain hastened the slippage of unstable land beneath their upscale houses. They want to know why the problem wasn’t detected earlier.

Last April, the tiny cracks that started showing up in the sidewalks and streets in Anaheim Hills were cause for concern. Now, as some of those cracks grow big enough to swallow a basketball, they are cause for despair.

In the span of less than a week, the value of million-dollar homes has been reduced to nearly nothing as foundations split, walls break apart and pools crack open like eggshells.

Some residents wonder aloud if even the land where they built their dream homes will remain or whether it will crumble into somebody else’s back yard.

Perhaps worst of all, the 46 families who were ordered out of their residences last week may have little financial help to rebuild. Most insurance companies don’t cover landslides, some of the developers who built on landslide-prone land have since gone bankrupt and the city is generally immune from liability in natural disasters.

“This has been an incredible week,” said an exasperated Sunny Lundstrom, who, along with her fiance, had to evacuate the hills after their home started cracking apart. “We really don’t have a house anymore. . . . How could this happen?”

For Lundstrom and many other residents of the upscale neighborhood, that is indeed a troubling question.

According to the city’s geologists, many homes in Anaheim Hills sit on an ancient and, until recently, undetected landslide that sheared off a hillside during the Ice Age. The slide, which had been dormant for millions of years, was reactivated last year for unknown reasons.

It had been creeping along at a snail’s pace before the recent downpours, moving only one inch in the nine months since residents reported cracks in the streets and sidewalks to city officials. The slipping accelerated after the heavy rains. In just one week, the slide has moved as much as 14 inches and continues at a rate of one to two inches a day in some areas.

Because of the instability, city officials have ordered the evacuation of residents from Avenida de Santiago, Rimwood Drive, Georgetown Circle and Pegasus Street for a minimum of two weeks. Since Tuesday, as many as 150 residents have packed up their belongings--everything from fine china to a favorite pillow--preparing for extended time away from home.

City crews, meanwhile, worked feverishly to solve the problem. Wells were drilled to pump out underground water in an attempt to stabilize the soil, and even fancy pools with swim-up bars were drained so they wouldn’t spring leaks in the shifting soil and drain into the hillside.

But to many residents, the city’s efforts were too little and too late.

Sam Choi, an anesthesiologist who lives on Avenida de Santiago, said the city failed to take the problem seriously until the heavy rains made the slippage worse.

“For months they did nothing,” he said. “They ignored us. Now, they are starting to act, but why didn’t they do something sooner.”

City officials say they took action as soon as they were notified of the problem by residents last June. They immediately hired a geological consulting firm to look into the situation.

That firm, Eberhart & Stone, was supposed to give the city recommendations on how to mitigate the problem in February. Mark McLarty, a geologist for the firm, told residents at an emergency town meeting Tuesday night that this month’s unexpected deluge accelerated the landslide’s movement and forced the evacuations before the firm could even finish its study.

Since that meeting, some angry residents have talked about filing a class-action suit against the city, charging it with negligence. Most of the residents said they wanted to know why the slide wasn’t detected before the homes were built 10 to 15 years ago.

Natalie Lockman, development services manager for the city’s Public Works Department, said all the proper soil tests were done before the area was developed. Three geological soil studies were performed more than a dozen years ago, she said, and none found evidence of the landslide.

A 10-page report in city files, however, indicates that Anaheim officials were told of possible landslide problems in the area as early as 1979.

After a minor landslide that year during housing construction by Pacific Coast Builders on Leafwood Drive--near the current slide area--a geological consulting firm, D.A. Evans Inc., was called in to conduct soil tests.

That firms’ report mentions the possibility that the area was an ancient landslide zone.

Both Pacific Coast Builders and D.A. Evans Inc. appear to have gone out of business.

Public Works Director Gary A. Johnson, whose office has been handling the slide problem, said he had not been aware of the report, but did not believe the 1979 slide and the current problem are related.

Even if there wasn’t a history of slides, several geological experts said they believed the danger could have been discovered before any homes were built in the area.

“It’s common knowledge that if you build on a hill, there are going to be problems,” said Roberto Villaverde, a UC Irvine professor of civil engineering.

Those problems, Villaverde explained, are usually detected during soil tests that developers conduct before construction.

“A good soil engineer should be able to determine if there are (such) problems with a piece of land,” he said.

However, Villaverde added, developers are sometimes reluctant to undertake the expensive geological engineering required to stabilize landslide-prone areas.

“It’s a matter of economics,” Villaverde explained. “Remedial measures are expensive, and if you’re only building a single house, fixing the problem with the land may cost several times what the house is worth.”

Jack Green, a geology professor at Cal State Long Beach, agreed with Villaverde that a detailed study is essential to finding potential problems.

“A thorough investigation by a competent geologist would have had a good chance of detecting an ancient landslide,” said Green, who sometimes acts as a geological consultant for real estate companies.

Whether the city or the developers knew, or should have known, about the landslide is an issue that will undoubtedly be determined by a court of law as residents try to reclaim some of their financial losses--losses that most homeowner insurance policies do not cover.

According to insurance industry officials, California insurance companies specifically excluded landslides from their homeowners policies in the mid-1980s after several costly slides. They say that the risk and the potential loss is too high to justify issuing such policies.

“Hillside homes are so limited in number that they don’t form a pool large enough that there can be the shared risk necessary for an insurance company to sell policies,” said Brent Hough, a Palm Springs insurance broker.

Even homeowners who purchased policies from the National Flood Insurance Program, the federal government agency whose policies protect against water damage, are probably not covered.

A program spokesman said the policies only cover damage caused by a “river” of water or mud, but not damage from soil erosion or landslides caused by water saturating the ground.

Without insurance coverage, rebuilding in the area will be a costly proposition.

Like the homeowners, the city is also feeling a fiscal squeeze as a result of the natural disaster, having to dip into its reserves to handle the crisis. City officials have asked the federal and state governments to reimburse its costs. The same government agencies are being asked to provide low-interest loans to the slide victims. A decision on whether federal aid will be made available is expected Monday.

City Manager James D. Ruth said many costs have not yet been tabulated. He said up to $80,000 is being spent with contractors drilling the wells through which the excess water is being extracted from the hillside. The damage to sidewalks, streets, sewers, water pipes and other city infrastructure is estimated at more than $400,000.

“We will spend what it takes to cover what is necessary,” Ruth said. “Our first concern is the health and safety of our residents.”

Safety was also a priority for most of the residents. With the exception of one family that refused to leave, the more than 150 residents of the threatened structures abandoned their homes voluntarily when they were asked.

None of them, however, were happy about it.

“The most frustrating thing is that everyone--the city, our insurance company--is noncommittal. I can’t plan for anything,” Ray Diaz said as he was moving out of his Rimwood Drive home earlier in the week. “It’s obvious we won’t be here for a while.”

For Sandy Steiner, who left her home on Avenida de Santiago, the evacuation meant sleeping on the floor of her video-taping store in Fullerton.

“I don’t even want to talk about it,” she said as she carried her cat’s scratching pole out of her house.

Even those who are barely outside of the slide area said they feel helpless and are fearful of the situation.

Kathy Wiggam, who lives on Avenida de Santiago just outside the evacuation zone, said that seeing her neighbors threatened with the loss of their homes has made her appreciate what she has.

Correspondent Tim Chou contributed to this story.