COMMERCIAL REAL ESTATE : Report Urges County to Address Shortage of Affordable Properties : Lack of land for homes and industry near urban centers is threatening L.A. area’s prosperity, group says.

“Give me land, lots of land,” the old song goes. “Don’t fence me in.”

That plea could be Los Angeles County’s theme song these days as a shortage of land for homes, apartments and factories poses one of the biggest threats to the county’s continued prosperity.

Lack of land for affordable homes and apartments presents an economic problem, experts say, because it means that people who already have a hard time finding affordable housing in Los Angeles County will have an even harder time in the future.

And lack of land to build modern industrial space threatens to prevent Los Angeles County from attracting the kinds of companies that bring the kinds of jobs L.A. sorely needs, according to a summer report by the Los Angeles Economic Development Corp.

The LAEDC has been lamenting the shortage of industrial space for several years now, but recently it has quantified the shortfall. The county needs about 21 million square feet of new industrial space per year but only about 10 million square feet is being built, according to President Lee Harrington.

That translates into about 1,200 acres of new industrial land needed every year to satisfy current demand, the LAEDC report said. “Failure to meet such demand could result in the loss of more than $700 million annually in high-value manufacturing wages to the local economy,” the report said.

The problem isn’t so much an absolute lack of land as a lack of land in the right places.

Except for the 1,087-acre Playa Vista tract near Marina del Rey and the 1,300-acre Porter Ranch in the San Fernando Valley, there are few undeveloped tracts close to existing centers of population and commerce in Los Angeles County.

Newhall Land & Farming Co. has about 6,000 acres remaining to develop for homes and industry in Valencia, where it has completed 14,000 homes and 12 million square feet of industrial space, and where it has plans for 9,000 more homes and 10 million square feet more of industrial buildings, said Marlee Lauffer, a company spokeswoman.

In addition to the Valencia property, the company has 6,000 acres of land to develop in Newhall, with about 5,000 acres scheduled for homes and 1,000 acres for industry, Lauffer said. Nearby in Santa Clarita is the partly developed 4,000-acre Stevenson Ranch, which is owned by Lennar Homes.

Otherwise, except for the distant edges of the county, the pickings are slim.

About 25,000 acres of county land lies within the 270,000-acre Tejon Ranch, most of which is in Kern County. Lancaster and Palmdale each have about 50,000 acres of land zoned for housing and 10,000 acres zoned for industrial development, according to Jim Gilley, Lancaster City Manager. Palmdale is also the location of the largely undeveloped Ritter Ranch, which is 11,000 acres.

When or how prominently any of these outlying tracts will figure in providing affordable housing and industrial sites, however, is uncertain.

“You can always find land, but there is a lack of well-located land with infrastructure in place, including transportation infrastructure, in areas that are suitable for development,” said Cal Hollis, a principal at real estate consulting firm Keyser Marston Associates Inc.

The county lacks the “attractive, safe, campus-like settings” that high-tech companies and high-paying manufacturers want, said Walter Hahn, an economist with E&Y; Kenneth Leventhal.

Hahn said the big stretches of empty land in Lancaster and Palmdale are “just too far away” to attract the high-paying manufacturing jobs that cities and counties crave today.

A big reason for the shortage of industrial and residential land closer to L.A.’s core is “zoning for dollars,” according to Larry Kosmont of Kosmont Associates, a real estate consultant.

“Cities are strapped for cash, so they have gone after retail uses on whatever sites are still available so that they can capture the sales taxes,” Kosmont said. Cities receive 1% of the state sales tax generated within their boundaries.

According to the LAEDC report: “Most cities have battled tooth and nail for the next big-box retailer or auto mall, consuming massive amounts of land which now generates few livable wage jobs. The ultimate outcome is quite foreseeable--too many retail establishments, too few customers, and failed projects.”

Industrial land is so scarce that the LAEDC’s list of the largest available parcels close to the urban core consists mainly of properties in the 50- to 200-acre range.

Costs of Converting a Property

But what about the millions of square feet of old industrial space in L.A.? Couldn’t some of those buildings be razed to make room for modern factories?

“There is a lot of land in South-Central Los Angeles that is well-located for industrial purposes, but the cost of converting [can be] prohibitive” because of the expenses required for demolition and any cleanup of contaminated industrial sites, consultant Hollis said. However, in some cases conversion may make economic sense.

Added Harrington: “What’s happening, particularly in South Los Angeles, is that growing companies are having to move out of Los Angeles County because they can’t find facilities to house their next stage of growth.” When the county loses those growing companies, it usually loses more desirable and better-paying jobs.

The relationship between affordable housing and economic development is much closer than it appears, according to economist Hahn. Even the well-paid technicians and professionals employed by technology companies often can’t afford to buy the types of homes they want in Los Angeles County, he said.

Another facet of the affordable-housing problem, according to Hahn, is that low- and moderate-wage workers are leaving Los Angeles County for cheaper housing in Riverside and San Bernardino counties. The Inland Empire has already lured many low-wage companies out of Los Angeles County because lower-paying businesses are following the workers there and vice versa, Hahn said.

The prospects for reversing this trend are bleak, Hahn said, because the high costs of land and construction prohibit the development of the thousands of units of affordable housing--mainly apartments--that the county needs for its growing population of low- and moderate-income residents.

“It’s a situation we’ve endured for decades, and it’s gotten worse” because the federal government has eliminated all but a few of the programs that once encouraged affordable housing, Hahn said.

The exodus of low- and moderate-paying jobs out of the county, the lack of affordable housing and the inability to attract high-paying employers add up to a dearth of employers in the inner city and a concentration of high-paying jobs in such white-collar areas as Los Angeles’ Westside and the beach cities, according to Hahn.

The LAEDC believes many parts of the county, including older industrial areas “resembling the former rust belt areas” of the East and Midwest, have the potential to provide land that could provide jobs.

Political Solutions Suggested

The LAEDC report offers a number of suggestions for improving the situation. Among them:

* Persuade state lawmakers to pass legislation that would allow cities a 25% cut of any state income tax generated by industrial redevelopment

* Form regional joint powers authorities to pursue industrial redevelopment

* Persuade the state to develop “revitalization zone” manufacturing incentives similar to those of the Los Angeles city revitalization zone program

* Develop more industry-oriented training at community colleges.

Harrington said the LAEDC is working on concrete analysis of the benefits that both the cities and the state would reap from the 25% share of the income tax from industrial redevelopment.

“We’ve got to convince the state that everyone’s a winner if we cause this redevelopment to occur,” he said. With or without state incentives, Hollis said, the county stands a much better chance of solving its industrial land problems than its residential ones because industrial properties are more likely to be developed in ways that generate profits for developers and taxes for cities.

Neither he nor any of the others interviewed for this article however, sees much chance of solving the affordable-housing shortage.

“Without massive subsidies, you can’t make them [apartments] affordable,” Hahn said. The federal government recently increased the amount of money it’s putting into housing programs in Los Angeles, but “it’s still just a drop in the bucket,” Hahn said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Space Available

Los Angeles County has a shortage of large tracts of land available for residential and industrial construction. Above are some of the areas with the greatest amount of developable land. Valenciaz: 6,000 acres

Stevenson Ranch: 4,000 acres

Newhall: 6,000 acres

Porter Ranch: 1,300 acres

Majestic Realty & Koll Development Co.: 400+ acres

Tejon Ranch: 25,000 acres

Playa Vista: 1,000+ acres

Carson Land Co.

Watson Land Co.

400+ acres

Lancaster

60,000 acres

Palmdale

71,000 acres

LESLIE CARLSON/ Los Angeles Times

Primary sources: Los Angeles Economic Development Corp.; Meyers Group

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Largest Tracts of Available Land in L.A. County

City/Area: Lancaster

Acreage: 50,000

Name/Type: Multiple small parcels

Zoning: Residental

Location: Along Antelope Valley Freeway

*

City/Area: Palmdale

Acreage: 50,000

Name/Type: Multiple small parcels

Zoning: Residential

Location: Along Antelope Valley Freeway

*

City/Area: Los Angeles City

Acreage: 25,000

Name/Type: Tejon Ranch

Zoning: Mixed

Location: East of Interstate 5, north of California 138

*

City/Area: Palmdale

Acreage: 11,000

Name/Type: Ritter Ranch

Zoning: Mixed

Location: Along Antelope Valley Freeway

*

City/Area: Lancaster

Acreage: 10,000+

Name/Type: Multiple small parcels

Zoning: Industrial

Location: Along Antelope Valley Freeway

*

City/Area: Palmdale

Acreage: 10,000+

Name/Type: Multiple small parcels

Zoning: Industrial

Location: Along Antelope Valley Freeway

*

City/Area: Santa Clarita

Acreage: 4,500

Name/Type: Newhall Land

Zoning: Mixed

Location: Interstate 5 and Antelope Valley Freeway

*

City/Area: Santa Clarita

Acreage: 4,000

Name/Type: Stevenson Ranch

Zoning: Mixed

Location: West of Interstate 5

*

City/Area: Los Angeles

Acreage: 1,300

Name/Type: Porter Ranch

Zoning: Mixed

Location: Northwest corner of San Fernando Valley

*

City/Area: Los Angeles

Acreage: 1,000+

Name/Type: Playa Vista

Zoning: Mixed

Location: Near Marina del Rey

*

City/Area: Industry

Acreage: 400+

Name/Type: Majestic Rlty & Koll Dev.

Zoning: Industrial

Location: Pomona and San Gabriel River freeways

*

City/Area: Carson

Acreage: 400+

Name/Type: Carson Land, Watson Land

Zoning: Industrial

Location: Rancho Dominguez

*

City/Area: Los Angeles

Acreage: 208

Name/Type: Goodyear property

Zoning: Industrial

Location: Avalon Boulevard and E. Slauson Ave.

*

City/Area: Santa Fe Springs

Acreage: 200

Name/Type: Golden Springs

Zoning: Industrial

Location: Imperial Highway and Shoemaker Avenue

*

City/Area: Los Angeles

Acreage: 200

Name/Type: Wilmington property

Zoning: Industrial

Location: Anaheim Street and East E. Street

*

City/Area: Pico Rivera

Acreage: 200

Name/Type: Northrop/Grumman

Zoning: Industrial

Location: Washington and Rosemead boulevards

*

City/Area: Hawthorne Acreage: 190

Name/Type: Northrop

Zoning: Industrial

Location: El Segundo Boulevard and Prairie Avenue

*

City/Area: Los Angeles

Acreage: 170

Name/Type: Harbor Gateway

Zoning: Industrial

Location: West 190th Street and Normandie Avenue

*

City/Area: Downey

Acreage: 160

Name/Type: NASA/ Boeing

Zoning: Industrial

Location: Imperial Highway and Clark Avenue

*

City/Area: Los Angeles

Acreage: 150

Name/Type: Taylor Yard

Zoning: Industrial

Location: N.San Fernando Road and Glendale Freeway

*

City/Area: Los Angeles

Acreage: 100

Name/Type: Former Gen. Motors plant

Zoning: Mixed

Location: Van Nuys and Roscoe boulevards

*

City/Area: Los Angeles

Acreage: 50

Name/Type: Corn field property

Zoning: Industrial

Location: North Broadway and North Spring Street

*

List is a representative sample; “zoning” indicates primary intended use of property, but may include other uses; some development may have begun on some sites

Primary sources: Los Angeles County Economic Development Corp.; Meyers Group