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February 10, 2012

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Some Builders Find Older L.A. to Their Liking
An application for REALTORS®

L.A. is still a great big freeway, and it's hard to get from "here to there" quickly, especially in rush hour, which seems to last longer than anywhere else.

Well, maybe Atlanta is the exception. I think rush hour there is 18 hours long.

Unlike Atlanta, Dallas, San Diego and Houston, efforts to ease the pain with public transit don't seem to be catching on quickly in L.A.. Although you do see people waiting for the bus, they tend to be the less-affluent who cannot afford cars.

I know there is light rail from Pasadena to Union Station downtown, but I've never seen it in operation, even though I've passed by the station frequently.

Regular unleaded was $3.09 a gallon when I was there a couple of weeks ago, and predictions of a giant leap in gas prices has convinced me that fueling our rented mini-van will be the major expense of our cross-country camping trip at the end of June.

While Pasadena is relatively self-contained, the rest of the L.A. area doesn't seem to be.

Does that bother most residents? When I was there last July, a TV station was interviewing people as they got out of their cars in parking lots. Sure, they didn't like having to drive great distances, and, no, they didn't like spending so much time go short distances, and, yes, they wish they had viable alternatives.

As long as it didn't mean giving up their cars.

According to Cynthia Sener at Hanley Wood Market Intelligence, this is not the whole story. With land scarce, builders are looking at infill and redevelopment projects throughout the basin and valleys.

And, she says, the builders are being propelled into this by "buyers looking for shorter commutes and a more urban lifestyle."

Builders are focusing on the San Fernando Valley, Hollywood, downtown Los Angeles and South Bay housing markets, according to Sener.

If you drive even a short distance within the Los Angeles city limits, you can find plenty of evidence of this. The neighborhood around CBS Television City is vibrant and active, with evidence of recent construction, including an upscale mall and new multifamily that blends easy into the very upscale mansions that you come upon as you head further north on Beverly Boulevard.

Sener says that the change in the Los Angeles market began in 2004, when both small and large builders from outside the area saw opportunities to "rethink" residential urban living.

Smaller builders -- Howard Wright, the KOR Group, Lee Homes and Urban Pacific Builders -- began developing attached housing product in markets many considered less than desirable while larger builders more experienced with urban products, such as Intracorp, the Olson Company and Forest City Residential placed bets on downtown areas in Los Angeles, Long Beach and Burbank well in advance of them being rediscovered.

As a result, in 2005, more than 2,900 new attached housing units were sold, representing a whopping increase of over 325 percent from 2004. Projects such as Long Beach's Aqua, downtown's Elleven, and the new Renaissance community in Inglewood have now attracted the attention of larger public developers looking to cash in on this market.

Inglewood would seem to be the perfect spot for infill development. Known best by tourists as the place you pick up your rental car after arriving at the airport, it is filled with acres of parking lots that surround pocket neighborhoods of bungalows built in the 1920s. Yet, its proximity to the airport makes it a prime location for businesses with international connections and for LAX employees in search of an easy commute to work.

What's attracting buyers to this market? "There are a variety of factors, but certainly at play is the increased traffic congestion," Sener says. "The developments currently on the market take advantage of a mixed-use location that puts work, home, and play all within close proximity."

This trend is likely to continue throughout 2006, as builders continue to develop more high-density projects throughout the area. With little more than 4,500 units of attached inventory in new home projects in Los Angeles County, additional developments should bring relief for buyers looking to get into this market.

Is everyone willing to forgo the commute? If you look at the volume of construction going on along the Pacific Coast Highway in Malibu, for example, you'll quickly realize that a lot of people don't mind the commute if they can come home to the ocean.

But, with limits on coastal building, issues of public access to beaches, and just the price of a seaside lot, the trend to redeveloping older areas of L.A. may soon be the rule, and Malibu the exception.

Published: April 20, 2006

Use of this article without permission is a violation of federal copyright laws.


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