Demand for upscale housing is driving a land rush in ritzy neighborhoods across the San Fernando Valley, but a push by developers to build several homes on large lots in high-end neighborhoods has the city of Los Angeles cracking down.

Councilwoman Cindy Miscikowski is pushing for a zoning change that would prevent developers from squeezing what she sees as too many homes on large lots in Encino, a community that increasingly is seeing home sales in the $1 million-plus price range.

"We've had (developers) come in and take one of these lots, turn it on its side and try to get eight tiny houses on it," said Miscikowski, whose 11th District includes parts of Encino, Tarzana and Van Nuys. "It completely destroys the integrity of the neighborhood and orients it in a different manner."

Residents complain that the practice makes their upscale neighborhoods look tacky more like a common housing tract than an affluent enclave. They argue that the projects are overtaxing already-congested streets.

"People move to the Valley to have some space and some privacy," said Helen Arthur, an Encino resident who helped mount a petition drive to change the zoning laws in her neighborhood. "I didn't move here to live on a Wilshire Boulevard-type street."

But developers say that Miscikowski's efforts are aimed at appeasing wealthy constituents at the expense of good planning policy in the land-poor San Fernando Valley.

"The neighbors may be happy, but in the bigger scheme of things we have a population that needs housing," said Ray Pearl, a spokesman for the local chapter of the Building Industry Association of Southern California. Pearl said developers are continually being chided by government leaders to build in-fill projects rather than add to urban sprawl, but in this case, developers who are attempting to comply are being penalized with new restrictions.

Miscikowski said she's simply responding to concerns by her constituents. "This is not a broad brush. This is a fine tuning done at the behest of neighbors," she said.

While the Los Angeles Planning Department was unable to provide statistics on the number of new housing starts or renovation projects, it's easy to see the activity underway south of Ventura Boulevard.

"Values are going up, and people in the real estate business are looking for opportunities," said Frank Fielding, a senior planner for the city who oversees the San Fernando Valley. "The (developers and sometimes property owners themselves) are taking out a home on one of these large lots, and putting six or seven homes in its place. People are waking up to the fact that this is happening.

The median home price in the Valley was $212,000 in August, according to the Southland Association of Realtors, but the median home price in Encino was more than double that, at $458,000. It's not uncommon for homes on the high end of the market to sell for $1 million to $2 million.

David Spiegel, owner of Spiegel Development Inc. of Sherman Oaks, said developers like himself are buying marginal homes on large lots, even if they have to pay what might seem an exorbitant amount. They stand to make a substantial profit by subdividing the property into four or five lots. "You're buying for the land values," Spiegel said.

He is in the process, for example of developing two homes on Havenhurst Avenue. The two half-acre lots are worth about $595,000 each, though when considering that the homes likely will sell for $1.2 million each, the cost of land pencils out.

Miscikowski's proposed ordinance, which is being processed by city planning staff, would change the zoning in the neighborhood south of Ventura Boulevard, east of Petit Avenue and north and west of Libbit Avenue. Currently, the area is zoned R1-1, which allows developers to place one home on each 5,000 square feet of space. Miscikowski is asking that the zoning be changed to RE9-1, which would require developers to have at least 9,000 square feet of space for each home, reducing the potential for lot splits.

While the area in question is relatively small, just a few blocks wide and long, the councilwoman's staff has been in discussions with residents in neighboring Tarzana about instituting a similar zone change there. "Where any neighborhood finds the zoning not compatible, I'm happy to explore it with them," Miscikowski said.

Beth Sommers, president of the Southland Association of Realtors, said the movement would likely spread to other areas, further reducing the supply of lots in the land-starved Valley.

"Once one neighborhood gets this, everyone's going to want it," said Sommers. She added that residents' concern that lot splits will hurt property values is unfounded, pointing out that homes on the beach, for instance, have no lot lines and sell for $2 million or more.

"Just because I bought my house 20 years ago shouldn't give me the right to say what my neighbor does with their property," said Sommers.

Pearl said the proposed ordinance, if passed, would severely restrict development in the neighborhood, and he too fears similar restrictions would make their way to other Valley communities.

Fielding, the city planner, conceded that while the proposed ordinance would not outlaw subdivisions in the neighborhood in question, "It will probably cut it down to a very small number," he said.

It could be as long as a year before the ordinance gets through the public hearing process and finally makes its way to the City Council for a vote. But Fielding cautioned developers looking to beat the clock that it could take just as long to process a subdivision request and even then the council always has leeway to reject the proposal.

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