Housing trends in California are usually three to five years ahead of those in the rest of the country.
Whatever shows up on the West Coast-in terms of style, design or amenities-almost always works its way to the center of the United States a few years down the line.
But it appears that this year the trendsetters are behind the times, beaten to the punch on the latest in housing innovations by the cities of the Midwest-and beaten by perhaps 70 or 80 years.
The hottest topic at this year`s Pacific Coast Builders Conference, a regional trade and educational show sponsored by the California Building Industry Association, was high-density single-family housing.
Builders, architects and planners, who in years past have started the nationwide ball rolling on such things as lofts, media rooms and vaulted ceilings, last week were talking instead about alleys, front porches and narrow lots.
It was as if they had seen the vision of the future of housing, and it was the Chicago bungalow.
”The premise that we work from is that the buyer`s first choice is a single-family home,” said Glenn Cardoso, partner in Urban West Communities in Santa Monica, Calif. ”The relationship of the house, the garage, the laundry, the living areas and the yard all have to relate to single-family.”
For an infill project that Cardoso`s firm is building in Huntington Beach, planners and architects came up with a concept that will seem familiar to many Chicagoans.
To get a density of 11 units to the acre, the builder used 25-by-170-foot lots-”almost all house and garage” at 2,600 square feet-placed the garages on a rear alley and left three-foot side yards between each home.
Rather than wait for an enterprising owner to build out the attic, as many a bungalow owner has done over the years, the builder provided a ready-made second story of living space. And in one nod to the Southern
California lifestyle, many of the homes also were built with a rooftop deck.
”What we`re doing is dropping away from the typical six- or eight-plex multifamily development that we would have been doing,” Cardoso said. ”We`re seeing more innovative projects and more innovative ways of getting these densities.”
Density is important to a builder because the more homes that can be put on an acre of land, the lower the cost of each home can be. Land prices, which had been soaring in California but have stalled for now, make up 25 percent or more of the cost of a new home.
Higher densities also allow for some other economies of scale that help hold prices down and build profits up. But they are also frowned on many times by municipalities because, among other things, those densities can put a bigger strain on services.
Older cities such as Chicago tend to be dense places. Lots are narrow, alleys service the rear of the homes, and sidewalks and parkways provide the streetscape.
But in cities and suburbs built after World War II, when the automobile and not the pedestrian was dominant, housing is less dense. Lawns are wide and garages prominent in subdivisions developed when land prices were a fraction of what they are today.
”We are looking back through history at some of the examples that have been provided to us and using the technology of today to make them work again,” said Robert Steinberg, president of The Steinberg Group in San Jose, Calif.
”Alley schemes are taking place throughout the western United States and we`ll see more and more front porches as we develop more compact communities. We are pushing the limits of (dense) single-family housing,” he said.
Steinberg has a project in Santa Clara with 14 units to the acre. It is built on the site of a former shopping center that fell into disrepair.
”The streetscape is pretty intense with that many units. But the interiors have been successful, incorporating things like island kitchens, transoms and glass doors,” Steinberg said.
Architect Philip Hove, who is also working on project designs with up to 14 units to the acre, said such high density can often compromise the livability of a home.
”Maybe we`re pushing it a bit too much. We may not be giving the buyers the lifestyle they want (in projects with 14 homes to the acre),” Hove said. ”Things like privacy, streetscapes and outdoor spaces shouldn`t be given up for the sake of density,” he said.
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More than 7,000 building industry professionals from the western United States attended this year`s Pacific Coast Builders Conference. With more than 62,000 square feet of exhibits, the show is the largest regional building conference in the country.
The times for West Coast home builders, though, are anything but bright. In California, which leads the nation in new housing production and which many economists look to as a barometer of the housing climate nationally, starts fell in 1991 to their lowest level in nine years. And although sales picked up early this year, they have fallen again of late.
”The last two years have been very difficult for home builders and their buyers,” said William Mazza, president of the California Building Industry Association.
”I believe the industry is in for another tough year. The promised economic recovery has not begun its march. It`s still on the parade ground,” he said.
National housing start numbers fell in April after two months of strong gains. The number of permits issued, a measure of future activity, also dropped. Those statistics underscore what Mazza called a ”fragile economic environment.”
One of the major concerns for home builders across the country, and in California in particular, has been the difficulty in securing financing for the acquisition and development of land, the first steps in producing new housing.
A credit crunch in real estate lending has dried up loans to many commercial real estate projects, and land acquisition and development loans are considered commercial.
More than one builder is reporting that building projects are on hold because of a lack of such loans.
”The situation is putting a damper on new project potential, especially in this volatile economy,” said Dennis Russell of Den-Ed Russell Inc. in El Cajon.
Home builders have been seeking alternative sources of AD&C money, including taking their companies public and using stock sale proceeds to fund development.
One important avenue to providing a source of funding for such loans could be the pension fund community. Efforts to tap those investors have met with limited success, but hope is building.
The California Public Employees Retirement System, or CalPERS, has pledged $375 million in equity gap capital for the state`s beleaguered home builders.
”Banks are being ultraconservative, making it difficult for builders to develop projects,” the CBIA`s Mazza said. He called the CalPERS move ”sorely needed” and said he hoped it would spark additional pension fund interest in home construction investment.
