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Employers Seek Solutions to O.C. Housing Crunch

Real estate: Business leaders at a UCI conference say affordable dwellings are necessary to retain workers.

April 09, 1999|DARYL STRICKLAND | TIMES STAFF WRITER

With soaring home prices making recruiting and retaining employees increasingly more difficult, Orange County's largest business group said Thursday that employers want to play a larger role in helping find ways to house their workers.

"The problem today is not attracting a work force, but where to house them," said Peter Case, a senior vice president for Merrill Lynch & Co., which last year pledged $1 million to create a public-private partnership to find ways to create more affordable housing.

Case and other business, government and academic leaders spoke Thursday at a daylong housing conference at the University of California, Irvine, School of Social Ecology. The symposium was sponsored by the 1,000-member Orange County Business Council and attended by about 700 people.

In a recent poll, Business Council members rated affordable housing among their top five concerns, said Stan Oftelie, the council's president. Employees who leave major Orange County companies cite housing costs or long commutes as key reasons for their departure.

Many of the old solutions to past housing-price spikes no longer work, conference participants said.

Unlike decades ago, developers cannot simply build on cheap land farther away from major job centers, said Bill Fulton, who publishes a newsletter on housing and is the author of several books on the subject. That creates more pollution, more sprawl and more traffic congestion.

But there has been little regional cooperation between local governments to provide more affordable housing.

"There is no effective way to force local government to work together," Fulton said. "I think it's probably true that only the business community can change that equation."

Case said that there is "a great deal of interest" among businesses to help nonprofit builders create more housing for lower-income workers and that he expects several initiatives to be announced later this year.

Similar efforts have been launched in Silicon Valley, one of the few places where housing prices exceed Orange County's. The Silicon Valley Manufacturing Group, a coalition that pushes for more affordable housing, has helped produce more than 16,000 new homes during the past four years.

Orange County produced 63,000 jobs last year but issued only about 10,000 housing permits, far short of what's needed to create balanced growth.

Several participants said that shrinking tax revenue encourages cities to build retail centers instead of housing. The region needs to consider creating higher density housing, building more rapid transit, converting abandoned industrial land to housing, and creating more opportunities for nonprofit developers.

"Only businesses combine the political power and the economic wherewithal to break the barriers affecting the building of more moderate-priced housing," said Scott Bollens, chairman of UC Irvine's School of Social Ecology.

The conference came three months after the county's median home price eclipsed the boom of a decade ago, ending 1998 at an all-time high of $236,000. Several national studies have cited the county as the leading market in housing appreciation.

Home prices have risen from year-earlier levels for 21 consecutive months, and many experts believe that low production, high demand and low interest rates will produce another record, perhaps as early as this summer.

While homeownership is at a high nationwide--two out of three people own the homes they live in--housing increasingly is becoming out of reach for many in Orange County, Bollens said. Between 60% and 65% of the county's residents cannot afford the median-priced home, which requires an annual household income of about $70,000, he said.

Former Housing and Urban Development Secretary Jack Kemp, the conference's keynote speaker, suggested that the state form a board to look at the barriers to building lower-priced housing.

"I'd like to see California with a review board looking at all regulations, including wetlands, zoning, developer's fees on low-income housing," said Kemp, who bought his first home in Costa Mesa nearly 40 years ago.

Kemp, the Republican vice presidential candidate in 1996, said after the program that he would not seek the party's presidential bid in the 2000 election. Instead, he pledged to "spend the rest of my life" joining former President Carter in the nonprofit group Habitat For Humanity, which builds homes for the needy.

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