By CHRISTOPHER WOODARD
Staff Reporter
Newhall Land & Farming Co. already has 30,000 lots slated for development in and around Valencia.
So why would it team up with Kaufman & Broad Home Corp. to develop a 5,000-home community in Palmdale, where home prices generally have been depressed?
The answer lies in the explosive growth expected in L.A. County where the Southern California Association of Governments expects another 3 million people to be living by 2020.
“It may seem like we have a wide variety of (lots available) out here, but look at what the demand is and you realize we’ve got an impending crisis on our hands,” said Marlee Lauffer, vice president of community relations for Newhall Land.
SCAG estimates that L.A. County will need an additional 185,000 housing units, or 37,000 a year through 2004, to meet the demand. But Newhall’s total inventory of 30,000 lots property the developer wants to build out over the next 20 years or so wouldn’t even satisfy a year’s worth of countywide demand.
Meanwhile, home prices are increasing in Valencia. With the planned Palmdale community, dubbed City Ranch, the two development companies want to cash in on first-time homebuyers who are being priced out of the Valencia market where the median resale price of a single-family home in August was $245,000. That was 16.7 percent more than in the like month a year earlier.
Despite its decision to pursue the City Ranch project, Newhall Land is hardly ready to abandon the booming real estate market in Valencia. In the years ahead, it plans to develop its 9,000 remaining lots there and to build 21,000 additional housing units in its nearby Newhall Ranch project, a planned community of 70,000 homes targeted for an agricultural area on the Ventura County border.
Jack Kyser, chief economist for the Los Angeles Economic Development Corp., said Newhall Land’s decision to build yet another planned community “may seem crazy, but it’s not crazy at all.”
He said Southern California faces a serious housing crunch that could make it more difficult for the area to attract and retain a workforce to meet the needs of employers.
“If you want entry-level housing in Southern California, you have to go east to Riverside or San Bernardino, or north into the Antelope Valley,” said Kyser. “We have a homebuilding deficit, and if we don’t get busy, we are definitely going to be hurt in our competitiveness.”
Newhall Land recently announced that it had formed the joint venture with a subsidiary of Kaufman & Broad to develop the already approved master-planned City Ranch community in Palmdale.
As part of the transaction, Newhall Land acquired a 50.1 percent interest in the property owned by Kaufman & Broad and will act as master developer, with day-to-day responsibility for the project.
Located two miles west of the Antelope Valley (14) Freeway and about 26 miles east of Valencia, the City Ranch project will feature 4,200 single-family homes, 300 apartment units, and 260,000 square feet of commercial development. Also planned are schools, a lake, parks, riding and hiking trails, and a public golf course.
