Expert on Los Angeles Trends Focuses on the Big Picture

Real estate development never occurs in a vacuum, as builders were sharply reminded during the slow-growth battles of the 1980s. Changing public attitudes, sudden economic lurches, new environmental regulations, shifting demographics, immigration and upheavals in city politics can detour even the best-laid development plans.

Among those who are best qualified to describe the social, political and governmental contexts in which the real estate industry operates is Jane G. Pisano, a featured speaker at the 1999 Real Estate Trends Conference to be held Jan. 26 at the Regal Biltmore Hotel in Los Angeles. The event is sponsored by the Urban Land Institute and the Lusk Center for Real Estate at USC.

Pisano, who has long been a student of the forces shaping Los Angeles, was contemplating the future of the city and the region long before terms such as “Y2K” and “millennium bug” entered the language. She was president in the 1980s of the 2000 Partnership, a blue-ribbon group of business, education, government and community leaders who developed recommendations on how to solve the region’s most pressing problems. In 1988, the group delivered its final report, “L.A. 2000: A City for the Future.”

Pisano, who holds a doctorate in international studies from Johns Hopkins University, is senior vice president for external relations at USC. A specialist in public policy and political analysis, she has served as a special assistant for national security affairs as a White House Fellow and served on the faculty of the School of Foreign Service and the department of government at Georgetown University. She spoke recently with The Times about the forces shaping Los Angeles, how those forces affect real estate development and how Southern California has fared since the days of the “L.A. 2000” report.

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Question: Real estate is known for being a very local business. Do “big picture” issues really matter to most people in the industry?

Answer: What we’ll be talking about at the conference is the importance of understanding the forces of change that are at work in Southern California and have been for decades, so that real estate developers and planners come away with not only the technical knowledge of what’s new and what’s hot, but hopefully come away with a perspective that will enable them to be more effective entrepreneurs, to anticipate niches, to find those niches and grow them. The nuts and bolts of the business are tremendously important, but you can’t use all of those tools to your maximum advantage if you don’t know where you’re going.

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Q: In view of your experience at the helm of “L.A. 2000” and what you’ve seen since the 2000 Partnership delivered its report in 1988, do you think Los Angeles is headed in the right direction?

A: I think Los Angeles is doing very well. When we looked at the region then, we saw an economy that was fueled by the growth of small businesses. Since then, we’ve seen a continued shrinking in the number of Fortune 500 companies who remain in Southern California, and yet the economy here is stronger than ever. So there is something going on here that has to do with this fluidity and flexibility and the growth of small businesses. Back then, we also talked about the growth of international trade and manufacturing, both of which were a little bit counterintuitive then. But we can see today that our economic growth as a result of international trade remained strong last year, even with all the troubles in Asia, and our manufacturing continues to exceed all of our expectations. I think we got it right in the “L.A. 2000” report. Certainly we didn’t foresee the recession-depression of the early 1990s, but the trends we identified then have continued.

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Q: Among the specific problems cited in the “L.A. 2000” report were the lack of affordable housing, the need for more public transportation, education and the widening of the gap between rich and poor. How have we fared in addressing, say, affordable housing?

A: In 1988, our report said there was a housing shortage that would be compounded in the future because 200,000 existing units were deteriorating and at least 50,000 additional units failed to meet seismic safety standard requirements. We published this before the Northridge earthquake, which would have increased those numbers. We said then that the city alone must produce 10,000 new affordable units each year, just to keep the housing shortage from worsening, and in order to meet projected regional demand by the year 2010, we would need an estimated 1 million new low- and moderate-cost housing units. We’re so underfunded and underinvested in affordable housing now I can’t give you the magnitude of the number. As a nation, we are going to have to now take again extremely seriously the need to build affordable housing for low- and moderate-income people--middle-class people. In my view, it is important public policy to provide opportunities for home ownership for low- and moderate-income buyers and to be able to do so in areas near where they work. It’s equally important that there be opportunities for affordable rental units.

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Q: How are we doing in solving the public transportation problem?

A: In the “L.A. 2000” report we recommended an enormous transportation agenda with a big price tag that included heavy rail, light rail, buses and other solutions. It’s quite clear to me now, 11 years after the publication of the report, that because we didn’t have the funding to do all of those things we’ve implemented our transportation programs in a way that has not met the needs of the people who are most dependent on public transportation. I’m very sorry about the loss of credibility of the MTA, but I do think it is now going in a good direction, which is a greater reliance on bus transit and, hopefully, a greater commitment to those parts of the city where the transit-dependent population is so large. But we need to do a better job in transit in anticipating who’s going to be using transit and where do they need to go and what is the intensity of their use.

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Q: During the dark days of 1994, when L.A.’s reputation was at a low ebb, at least in the media, you wrote an opinion piece in The Times that said the pessimism of the early 1990s was as off kilter as the boomtown optimism of the late 1980s. Where do we stand today?

A: When we delivered our “L.A. 2000” report, it was hard on the heels of the Olympics, which were a tremendous success and really put L.A. on the global map--and that capped decades of growth and prosperity. I think we had a collective sense that we had figured out how to be the 21st century city. Then came the riots, the recession-depression, the Northridge earthquake, the fires and the floods. I think they resulted in a pessimism then [in 1994] that was just as unwarranted as the optimism of the 1980s. I think that collectively we are a lot more sober about where we are and where we’re going today than we were in either of those earlier periods.

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Q: Developers often blame governmental regulations for retarding progress, while many who oppose development find regulations too weak. What’s your view?

A: Government is supposed to be an expression of the will of the people. That is particularly true of local government, which is the level of government closest to the people. Often when there are attempts to create a “we-they” conflict involving government, there is an implication that government is somehow other than we the people. But it’s not an adversarial, either-or situation. I believe that what people want are livable communities, which were a very important cornerstone of the “L.A. 2000” report in 1988 and now have come back into vogue. I believe government and market forces have shown they can work together to produce livable communities.

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Q: For example?

A: Look what’s happened in Pasadena. Old Pasadena, with its mix of residential and commercial activity, is a tremendous example of what happens when you have government--we the people--and market forces working together to create a livable community. There has been real government involvement and--some would argue--much too much in the way of rules and regulations. And yet at the same time, it’s been a bonanza for developers, retailers and, I presume, for people who live there as well.

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Q: How is downtown Los Angeles doing in terms of becoming a livable community?

A: Downtown Los Angeles is a mixed picture, but one of the things I love the most about it is the area immediately around the renovated Central Library. It was a true public-private partnership with a lot of involvement on the part of both the city and developers. It has created, in that part of Los Angeles, a real livable space where people can gather and which is aesthetically pleasing as well as a place for commerce. There are major new attractions for people to come downtown in the works, like Staples Center and Disney Hall, which is going to be an architectural landmark. What downtown needs more than anything, I believe, is more people living there, so that it becomes more of a 24-hour community. It’s still far too deserted at night, but there are enough people out and about downtown at night that you get a sense of what it could be if there were more critical mass.