Ways to Drop Home Prices Sought
High land prices, restrictive zoning and planning delays are impediments to creating more affordable housing in Ventura County, a panel of experts said Wednesday.
The need for such housing in the county has never been greater, but creating lower-priced shelter will take more cooperation among developers, lenders and elected leaders, said Ventura City Manager Rick Cole, a speaker at the third annual Ventura County Housing Conference. In August, the median price of new and existing houses and condominiums in the county exceeded $514,000.
“We’re going to make it possible to build a lot of homes in Ventura, across all types of price ranges, but you have to keep the quality high,” Cole said during a break in the daylong conference at the Ronald Reagan Presidential Library near Simi Valley. “That’s how you develop neighborhoods, not just homes.”
Cole, who stepped into the Ventura job in April, advocates principles that include higher density, mixing residential and commercial land use, and neighborhoods that favor pedestrians and mass transit.
A city must ease restrictive zoning and make the permitting process more predictable if it expects developers to create more townhomes, condominiums and apartments to accommodate young, working-class residents, he said.
“We have to build accountability in government. We need to say to developers, ‘If you do what we want you to do you can have a permit in six months, not four years,’ ” said Cole, adding that builders in his coastal city have been paying “absurd costs” for land, from $90 to $200 per square foot, or up to $8.7 million per acre.
W. Steven Seemann, vice president for Shea Homes, said land cost is the top expense for most projects, but environmental regulations, lengthy processing schedules, stringent construction standards, soaring workers’ compensation premiums and other insurance expenses also force up housing costs.
“We don’t build expensive communities because we want to. Million-dollar homes are too risky, not too many people can write that kind of monthly check. And the market might change on you,” said Seemann, whose company is developing the 2,800-home RiverPark development in Oxnard. “We want to see housing prices go down, because it’s a lot more stable for our industry.”
Seemann said buyers will have to lower their expectations and accept more density, with smaller units and fewer amenities if prices are to fall. Real estate consultant Dawn Dyer, chairwoman of Housing Opportunities Made Easier (HOME), said despite ever-rising prices a builder’s average profit margin is about 7% to 9% when all the costs are considered. Her analysis of several recent projects in the county indicate the typical 1,000-square-foot apartment cost $22,000 more than its market value unless the units are luxury apartments commanding higher rents.
George Dale, a Los Angeles attorney who specializes in insurance, urged the more than 220 people in attendance to lobby state lawmakers to limit the awards on construction-defect lawsuits, which he said has pushed premiums on multifamily projects to the point where large builders, such as Shea, have become self-insured.
Many cities prefer developing shopping malls and other retail uses instead of homes because state law returns more sales taxes on retail to local coffers, a policy that must change to encourage needed housing, said Jack Kyser, chief economist for the Los Angeles Economic Development Corp.
“You need a complete rethinking of the state’s tax laws. It all started with Proposition 13,” he said. “We have to come up with more thoughtful ways to develop high-density housing.”
Slow-growth regulations to discourage construction won’t work, he said, because more than half the population increase comes from local births, not people moving into the area.
Still, Kyser complimented the county for having a healthy economy with good jobs and the highest new-home price in Southern California during the second quarter. “I consider Ventura County to be the boutique county in Southern California. You didn’t pave it all over like in Orange County. You still have the beautiful vistas,” Kyser said
The housing conference, with the theme “Building Common Ground,” was coordinated by Cabrillo Economic Development Corp., the Ventura County Economic Development Assn. and HOME.
