Living La Vida Local


Housing for California’s residents is an issue of gargantuan proportions. It’s a job for no mere politician, but for the ‘Governator.’ Gov. Arnold Schwarzenegger is leaning toward “smart growth,” an urban vision which favors mass transit, rebuilding cities and slowing development
of farmland.

Visit and you’ll find that the Governator’s vision is the “wholesale restoration of declining urban areas.” He believes in cleaning up blighted sites and building homes on them.

“Some of the things the governor has signaled, looking at infill development and attached housing, all create an affordable product without being in conflict with environmental rules of preserving open space,” said Jon Ross, legislative counsel for the California Mortgage Bankers Association.

Santa Monica may serve as a worthy prototype for the Governator’s vision. The Community Corporation of Santa Monica currently oversees more than 2,400 low-income units on 78 properties throughout Santa Monica. They have developed many abandoned and under-utilized properties around town. It shares the view of what the Governator would like to do in other cities around the state.

Take our local vision and use it to revitalize the infrastructure. They’ve been building lofts all over downtown LA, but a low-income family is not going to be able to afford a half-million dollar loft.

“It creates a move-up environment: Somebody leaves a less expensive home to move there,” observes Robert Rivinius, chief executive officer of the California Building Industry Association.

Helping people pay for their housing is a huge issue. According to recent statistics from the California Association of Realtors, only 23 percent of California households can afford a median-priced home. The minimum income needed to buy that home is $93,490 — the national average is $40,990.

Not being able to live where you work is another major issue for city employees. Firefighters, police officers and other key employees often cannot afford to live within an hour’s drive to work. School districts and hospitals share the same issues because so little housing is being built in job centers. Community Corp. is confronting these issues in Santa Monica by proposing to build affordable condos along the Pico corridor. Our city is confronted with the same issues as the state: Each new condo requires a $100,000 subsidy. Where should that money come from?

The Governator has put together a highly acclaimed non-partisan troupe of individuals to tackle these monumental issues. Sunne Wright McPeak, a Democratic and opponent of “dumb growth,” has been appointed as Secretary of Business for the state Housing and Transportation epartment. The board of the California Housing Finance Agency (all non-paying positions requiring Senate confirmation) features John Courson, chairman, president and chief executive officer of Central Pacific Mortgage Company in Folsom (politically unstated); Peter Carey, Democrat and president and CEO of Self-Help Enterprises, a non-profit housing and community development organization; and Republican John Morris, president of John Gilbert Morris, Inc., a firm that invests in commercial real estate, venture capital, leveraged acquisitions, public global equities and public global fixed income.

“Each of these appointees has a history of service to Californians and their experience in finance and real estate makes them well-suited to serve on the agency’s board,” Gov. Schwarzenegger said. “The Housing Finance Agency serves an important role — helping low- to moderate income Californians realize their dreams of home ownership and ensuring the availability of affordable rental housing — and will be strengthened by their service.”

The California Housing Finance Agency was chartered in 1975 with the goal of financing below-market rate housing loans for low-to moderate income families and to provide home mortgage insurance for families in hard-to-serve areas.

Next week we will explore how the Governator will work with big business to confront California’s housing issues.

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Governator Attempts to Smooth out Housing Crunch

Do you remember back to the real estate boom in the 1980s? Demand allowed thousands of entry-level condominiums and townhomes to be built every year in California, allowing families to build equity through home ownership. Then it stopped.

It stopped “because trial lawyers spawned an avalanche of unwarranted lawsuits against the builders of practically every condo complex built in the 1980s and early 1990s. Virtually no affordable condos have been built for almost a decade,” observed San Jose Mercury News editor Dennis Ryerson.

The popular belief in the California housing industry is that our Governator, Arnold Schwarzenegger can get more growth in existing cities by limiting builders’ legal liability for building on former industrial sites and relaxing environmental laws.

“I need the people to help me accomplish my goals on their behalf. So I urge all the people to let their voices be heard,” Schwarzenegger has said. “Write and call your legislators and let them know you want action, and you want action now.”

“Clearly, there’s a need for affordable homes, particularly in high-cost areas
where the bulk of the state’s jobs are located,” affirmed Robert Rivinius, chief
executive officer of the California Building Industry Association, a lobbying
group. “Housing production continues to climb in affordable areas such as the
Inland Empire, Sacramento and Stockton, proving once again that people are willing
to continue moving a great distance away from their jobs to achieve the American dream of home ownership.”

The California Building Industry Association supports the Governator and his vision of reforming state environmental laws to reduce excessive litigation. And while we’re making wish lists, the housing industry has said that they would like the Governator to encourage higher-density development in existing communities, reduce development fees, and resist urban limits, growth control, and other policies that drive up the cost of

The Governator, who owns a variety of properties in Santa Monica, the Pacific
Palisades and Brentwood, received significant campaign contributions from several property-powerful development companies during last year’s campaign to recall Gov. Gray Davis. According to Inman news, five of Schwarzenegger’s eight
biggest contributions came from national builders, including $344,000 from A.G.
Spanos Companies and $192,000 from William Lyon Homes.

In defiance to the building industry, before leaving office, Davis announced a
$150 million funding package to purchase a 2,960-acre site to preserve it as open space.

“That’s an example of taking away over 3,000 housing units,” Rivinius observed. “If we had built those 3,000- plus homes, it would have created a move-up environment: Somebody leaves a less expensive home to move there.”

“The philosophy of Arnold Schwarzenegger is likely to be compatible with homebuilders in terms of getting hostile policies out of the way,” noted Tim Coyle, vice president of governmental affairs for the California Building Industry.

Thus far, the Governator has shown that he may be open to allowing for legal protection to builders who are afraid they will get sued over cancer cases if they build homes on a former industrial site.

“More regulation is not the answer to poor land-use planning,” declared Schwarzenegger’s spokeswoman, Karen Hanretty. “We need to invest in existing urban areas and remove current barriers to smart growth.”

The Governator also has denounced urban growth boundaries, an imaginary fence around a community beyond which there can be no more development. Urban growth boundaries have been established throughout Oregon and in 32 California cities.

“Some of the things the governor has signaled — looking at infill development and attached housing — all create an affordable product without being in conflict
with environmental rules of preserving open space,” said Jon Ross, legislative
counsel for the California Mortgage Bankers Association.

In April, Southern California home sales surged to a new high — $386,000 — according to DataQuick Information Systems. A total of 32,916 homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in April, up 0.8 percent from March’s 32,650 and up 7.3 percent from 30,675 for April last year.

(For your real estate needs, e-mail Jodi Summers at,
or call 310-260-8269).