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More inclined to build

In this hot market, homes are being built on hillside lots that once were passed over.

September 12, 2004|Darrell Satzman | Special to the Times

Forget personal assistants, orchestra seats at Disney Hall and SUVs as big as summer cabins.

Nothing quite makes the point that one has arrived in Los Angeles like a custom-built hillside home with a view.

L.A. County hills are akin to an immense three-dimensional jigsaw puzzle that has been filling in over a century of continuous development. And there are few pieces left.

A dearth of space for new building and strong demand for housing has sent prices of existing homes in hillside areas soaring. But the steep lots that remain are not vacant by accident. They are generally among the most problematic and expensive to build on.

Despite that, and such timeless considerations as fire, mudslides, neighborhood opposition and hefty insurance costs, area realty agents and builders say the wave of new construction taking place in hillside neighborhoods exceeds anything they've seen in more than a decade.

"It's challenging, but we saw an opportunity so we took to the hills," said Lance Todd, owner of Palmdale-based LT Construction, which is working on a handful of homes in the Hollywood Hills and Mount Washington. "Since real estate shot up, you're seeing a lot more building in the hills."

A sluggish residential market and tough new rules tacked onto hillside ordinances in Los Angeles and other cities after the 1994 Northridge earthquake put a damper on the construction in the hills for a time. But those days are over.

No longer are those precarious stilt designs that sprouted around Los Angeles in the 1960s and 1970s allowed. All new hillside homes now must have "closed" foundations.

And advances in shoring and erosion control have people taking a second look at properties once deemed too steep for building. A cruise through the Hollywood Hills these days will reveal numerous construction sites. Some are virgin hillsides where developers are building on spec -- without a buyer lined up -- and others are lots where smaller homes are making way for grander residences more befitting the neighborhood's new economic realities.

"Just look at the real estate values on hillsides. The demand is there," said Ken Deppe, president of Placentia-based Hillside Repair & Drilling Inc. "You also have people who bought 1,200-square-foot homes for $250,000. Those homes are now worth $800,000. They are sitting on all this equity and they're using it to rebuild."

But the trend is not limited to Hollywood.

"There's only so many properties and so much buildable land," said Shirley Ann Hill, an agent with MacGregor Realty in the Adams Hill neighborhood of Glendale, where a few new homes are going up on steep property. "If it's buildable, someone will be interested in it."

Previously passed-over lots are being reconsidered, according to L.A. City Planner Cora Smith. "What we are seeing now is people are finally trying to build on the lots that they didn't want to build on before. A lot of them are troubled properties."

Trouble or not, high home prices make it easier for single-family hillside homes to pencil out. And advanced construction methods have made it feasible and safe to build on land sloped up to 45 degrees. That's a few degrees steeper than engineers and builders were willing to tackle until a few years ago.

One reason is that builders have become more adept at grading hillsides to allow for the construction of flat pads where the house is anchored, as well as building the sometimes massive retaining walls that keep gravity in check. Caissons, cylinders that are drilled into bedrock and fortified with steel rebar and concrete, are now regularly employed in hillside home construction to ensure stability.

Nonetheless, building on hillsides is not a proposition for the weak of knee or the thin of wallet. Amid a sea of uncertainties, the one thing a buyer of hillside property can count on is that signing on the dotted line means the spending has just begun.

Andi Ferretti, an agent with Coldwell Banker Beverly Hills East, is representing the seller of two contiguous lots on about one-quarter acre of sharply angled hillside on Ledgewood Drive in the Hollywood Hills.

"It'll sell to someone looking to build their dream house," Ferretti said, "or a developer who will build on spec."

View property for $400,000 in a neighborhood of million-dollar homes may sound like a bargain to some, but there's no guarantee that those lots are even capable of supporting a home that's built to code.

Consider architect Sean Briski, who bought an empty hillside lot in Silver Lake for $55,000 more than a dozen years ago. He was forced to sit on his property for years because building simply did not make economic sense. He finally began construction last month on a house of his own design. Still, despite sharp appreciation in Silver Lake, Briski says his new, four-level 2,500-square-foot home will cost as much to build -- about $800,000 -- as it will be worth.

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