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Southern California's Real Estate Outlook Remains Strong But Need for More Housing is IntensifyingJuly 10, 2000Southern California's commercial and residential real estate markets will remain strong in 2000 as the region's employment - fueled by the growth of the entertainment and other industries - continues to increase. The region's strong employment and population growth has intensified the need for higher-density housing development, according to speakers at a recent ULI LA breakfast panel.The speakers were Stuart M. Ketchum of The Ketchum Company; Richard A. Lewis, president of Lewis Operating Corp.; Frank P. Stanek, president of international business development of Universal Studios Recreation Group; and James A. Thomas, CEO of Thomas Development Partners. They were introduced by Michael P. Russell, vice president of Arden Realty, Inc. Wayne Ratkovich, president of The Ratkovich Company, was the moderator. In the housing sector, Lewis said that he has noticed a correlation between the test scores of local school districts and local housing values: the lower the scores, the lower the housing values, and the less appeal to prospective buyers. To address this issue, Lewis said his company offers one housing unit in each of its complexes to a local school to use as it wishes, for example, to provide onsite tutoring or to attract teachers by offering them subsidized or free housing. In the Inland Empire, a new group of ''renters by choice'' is creating more demand for multifamily units, Lewis said. These are people who prefer to rent in apartment complexes with gated security, recreation facilities, retail stores and neighborhood support services. Stanek said that the strong growth of Southern California's entertainment industry has offset the decline in the region's aerospace industry in the 1990s, and demand for entertainment will continue to increase. Pasadena and West Los Angeles have emerged as markets for a growing number of dot.com companies, many of them focused on entertainment. TV and film production is strong, with studio space at full capacity. To compete with the dot.com companies for talented employees, traditional entertainment companies will need to offer more opportunities, Stanek commented. Thomas said there is a need for policies to solve the problems of urban sprawl and revitalize inner cities. He noted that state pension funds are becoming more involved in inner-city projects, for example, in development of mixed-use projects that create tax dollars for cities but also meet a need for housing. Stanek cautioned that developers, builders and others in Southern California's real estate industry should not become overly optimistic about the outlook for real estate. He noted that the industry still needs to address such critical issues as Southern California's explosive population growth creating the urgent need for higher-density housing. Lindsay McMenamin is a law student at Southwestern University School of Law. | |
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