Home builder to go to town in Antelope Valley
Low prices a selling point for high desert
This story appeared in the Antelope Valley Press on Saturday, February 21, 2004.
By ANN WISHART
Valley Press Business Editor
 
 

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LANCASTER - With California's population growing by 600,000 a year and 75% of the people in the state wanting to own a single-family home, there is a terrific demand for more housing.
The Antelope Valley is doing its best to help provide many of those homes in a hot market, and at far more reasonable prices than most of the rest of the state, said Robert Rivinius , president of the California Building Industry Association.

About 200,000 new homes will be built in 2004, Rivinius told the crowd of nearly 1,000 Friday morning at the annual Antelope Valley Board of Trade Outlook Conference seated in the Poppy Pavilion at the new Antelope Valley Fairgrounds.

That is the highest number of new homes to be built since 1989, he said, but the need in the state is for 230,000 to 250,000 a year. California has a 1 million-home shortfall because there have only been about 100,000 homes being built a year for the last 10 years when there should have been closer to 200,000 built.

"That's 1 million homes that would be generating $4 billion in property tax revenue that we aren't getting because we didn't build those homes," Rivinius said. A variety of factors besides the ups and downs of the state's economy have discouraged developers from building, including ever-growing development fees, laws that encourage litigation and zoning issues, he said.

So when developers can build in an area like the Antelope Valley where fees are still low, they really go to town.

Rivinius noted that in 2000 the median price of a home in the state was $200,000. In Los Angeles County it was $320,000 and in the Valley it was $126,000. Today the average home in the state costs $422,000; in the county the average home costs $485,000 but in the Valley the average home costs $276,000.

"Congratulations for that," Rivinius said. "It's a good selling point."

He added that the average home price in Ventura is $573,000, in San Diego it is $579,000 and in Orange County it is $720,000, which is why the Valley's share of the market is increasing.

Unlike the early 1990s, the home prices are not being artificially pressured by speculators.

"Speculation is not driving home prices," so there is no real estate "bubble" that threatens the area economy, he said. Solid demand and low interest rates are driving the market and, consequently, powering growth in places where there is still land and cooperative government officials.

"Your area is a good example of a commitment to affordable housing," he said.

Home building is good for a community's or a state's economy, he said. Sales tax fluctuates with the economy and consumers' moods, but property tax is a much more stable form of revenue for municipalities, Rivinius said. Every $1 spent on building or maintaining a home leads to $2.50 in economic output. The industry puts $257 billion into the U.S. economy every year.

"Housing is the backbone of a healthy economy," he said.

If California is to take advantage of the housing cash flow, both in construction and taxes, legislators need to put limits on the impact fees builders pay, pass legislation to control housing-related lawsuits, and encourage higher-density development of land, Rivinius said.

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