Home Values Rise Near El Toro Base
As the contentious debate over a proposed commercial airport in Orange County rages on, a new study concludes that housing values in the areas nearest the El Toro Marine Corps Air Station have been increasing at a slightly faster rate than in the rest of the county.
In the last six months of 1997, single-family homes within a seven-mile radius of El Toro appreciated by an average of 4.1%, compared with 2.4% elsewhere in the county, according to the study by the Anaheim-based real estate database firm Experian RES.
Over the two-year period that ended in December, the properties near the air station rose in value by 3.9%, the firm said, while they were up 2.4% countywide. The findings are statistically significant within a 95% degree of certainty.
Airport opponents immediately disputed the study, challenging the methodology and arguing that it’s too soon to measure any impact because it’s not yet certain if any airport will ever be built. If a commercial airport does go in, they say, it would surely lead to a severe loss in property values nearby.
“Homeowners are justifiably fearful of plummeting property values associated with a plummeting quality of life that a commercial airport at El Toro would certainly bring,” said Larry Agran, chairman of Project 99, a nonprofit organization that advocates a non-aviation plan for El Toro.
“People live real lives, they don’t live lives based on statistical models.”
Experian, a division of First America Real Estate Solutions of St. Petersburg, Fla., has taken no position on the controversial plan to convert El Toro into a commercial airport. It said it undertook the study independently and was not influenced by any outside groups.
Experian’s Nima Nattagh, a market research analyst who conducted the study, said the findings don’t indicate the future direction of housing values. “Has the proposed airport had an impact on housing values? No--so far,” he said. “But those are the key words--so far.”
Nattagh’s study tracked 1,661 randomly selected single-family homes in the El Toro area--including parts of Irvine, Laguna Hills, Lake Forest and Portola Hills--and 1,726 houses in other areas of the county. He attempted to make the samples similar in terms of the range of houses included, but he noted that there are some differences because the houses in the El Toro area tend to be somewhat newer and slightly larger.
He said he used an automated method of determining real estate values that Experian has developed for its commercial clients such as banks and appraisers, and which “mimics” the appraisal process. Using sales data from comparable properties no more than half a mile away, and information on individual characteristics of the houses being studied, the computer program comes up with an estimated market value for each house in the study.
His study found some differences within the seven-mile radius of El Toro. Those within about a three-mile radius appreciated only 2.8% during the last six months, and homes between three and four miles of the base rose 2.3%. The largest increase registered during that time period was in the five- to six-mile radius of El Toro, where property values rose 7.6%.
The Marine Corps is due to pull out of the 4,700-acre air station in mid-1999, and county voters have twice approved its reuse as a commercial airport.
The county Board of Supervisors favors the airport plan by a precarious 3-2 split, and in the spring it is due to vote on the master plan for the project. At the same time, airport opponents will unveil their own reuse proposal, which will likely include calls for parks, offices, commercial developments and other projects.
Some critics of the airport plan said the Experian study is misleading and doesn’t account for an impact on housing values in specific neighborhoods that stand to be most affected by the proposed airport.
“Is there a difference between the property that lies within the approach and departure corridors of El Toro compared to a comparable property outside of that region? You bet there’s a difference,” said Bill Kogerman, head of the anti-airport group Taxpayers for Responsible Planning. “And if an airport goes in, there’s going to be an even bigger difference.”
Randall Bell, a real estate analyst and managing director of Price Waterhouse in Costa Mesa, said he takes issue with the Experian study because it measures only the changes in housing values. It doesn’t take into account the actual property values, which already may be lower because they are located near an airport.
What’s more, he said, other studies on the impact of airports on real estate have found that the loss in value doesn’t occur until after the facility is built and the noise, traffic and pollution are apparent.
“I don’t disagree” with the methodology used by Experian, he said. “But I think it implies something that cannot be mathematically implied. I don’t know if it’s a useful expenditure of time or resources.”
A study completed last year commissioned by communities surrounding the Seattle-Tacoma International Airport found that properties within about five miles of the facility were worth 14% less on average than houses in a comparable area farther away.
The study, commissioned during an airport expansion to determine how the airport had already affected housing values, also looked at homes within two miles of the flight paths, and found that for every quarter mile closer to the takeoff and landing zone a house would lose about $5,000 in value.
“We’re not sure why,” these properties were diminished in value, said Theodore Lane, vice president of Thomas/Lane Associates, the Seattle economic consulting firm that conducted the study. “It’s noise, vibration, chemical pollutants--it just simply says that the quality of life directly under the flight path is less than a house a couple of miles away.”
Another study conducted in 1994 by Booz-Allen & Hamilton Inc. for the Federal Aviation Administration looked at housing values in the vicinity of Los Angeles International Airport. It concluded that noise decreased values by an average of 19% in the areas surveyed.
First Team Real Estate agents Marvin and Shirley Laderman in Mission Viejo said that in many Lake Forest neighborhoods the noise impact would be considerable, a fact that must be fully disclosed to current buyers. What’s not yet clear, the Ladermans said, is whether that is causing sales prices to rise more slowly than in unaffected areas a few miles away.
“We just haven’t come out of the [home sales] doldrums far enough right now,” Marvin Laderman said. “So from a purely academic point of view, it’s too soon to tell.”
Shirley Laderman said that disclosing potential noise impact does affect how potential buyers regard property in areas like Lake Forest.
“We have not had any serious problems” because of the airport, she said. “But if they have a choice between a property where we have to disclose about the airport, and another where we don’t, they’ll take the other property.”
Times staff writer E. Scott Reckard contributed to this report.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Airport Impact
Residential home values within seven miles of El Toro Marine Corps Air Station increased 3.9% from January 1996 to December 1997, with the biggest leaps occurring at least five miles away. Values in other parts of the county increased 2.4% during the same period.
Miles from El Toro: Change
Less than 2.99: 1.3%
3-3.99: 2.1%
4-4.99: 1.1%
5-5.99: 7.7%
6-7.00: 3.9%
0 to 7.00, inclusive: 3.9%
Countywide*: 2.4%
* Comparable homes
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Study Characteristics
The housing valuations are based on a study in which recent sales prices of comparable properties are used to determine values of other homes in the area.
El Toro Area
Residence type: Single-family homes
Number of homes: 1,661
Average year built: 1976
Average size: 1,918 square feet
Average lot size: 8,657 square feet
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Countywide
Type of residence: Single-family homes
Number of homes: 1,726
Average year built: 1965
Average size: 1,652 square feet
Average lot size: 9,117 square feet
Source: Experian Real Estate Solutions
