Valencia Housing Shift Approved : Moderate-Income Units to Be Built in Less Costly Area

Los Angeles County planning commissioners agreed Wednesday to let the Santa Clarita Valley’s largest developer abandon its promise to set aside 447 houses for moderate-income families in Valencia.

In return for release from the agreement, Valencia Co. will provide 547 housing units elsewhere in the valley, 100 more than the original agreement. But they will be mostly condominiums--472 units with one or two bedrooms--contrasted with the original promise to provide 447 individual houses with two or three bedrooms each in the new Northbridge tract.

The condominiums are under construction in Santa Clarita and range in price from $104,000 to $148,000, placing them in the moderate-price category. In addition, 75 houses will be built on 135 acres in Castaic in about two years. Comparable houses sell for $100,000 to $150,000 today, said Gary Cusumano, company president.

The Regional Planning Commission approved the company’s proposal by a 3-1 vote.

Cusumano said rising construction costs forced Valencia Co. to back off from its pledge to reserve one-fourth of the 1,788-unit Northbridge tract for buyers with moderate incomes.

“We’re not trying to escape our responsibility,” Cusumano told the commissioners. When Valencia Co. enters a contract, he said, “we like to think we can honor every portion of it.” But if held to its pledge, the company would lose about $23 million in revenue, he said.

Prices Up $70,000

When the Board of Supervisors approved a plan amendment for Northbridge in July, 1987, Valencia Co. officials said the average house would sell for $120,000. But today, those houses command a price of $190,000, said Gloria Glenn, company vice president.

The company’s costs have also risen since estimates were made in 1986, with insurance premiums much higher, land development outlays up by 50% and construction expenses up 43%, Glenn said.

Valencia Co. would have to sell the homes for $139,000 to make them affordable for buyers on moderate incomes, which under present federal guidelines range from $35,000 to $50,000 a year, Glenn said.

Selling the Northbridge homes at reduced prices would give each moderate-income buyer a “tremendous windfall” of $50,000, while neighbors paid the full price, Cusumano said. Such disparities in price would create jealously and dissension among neighbors, he predicted.

Cusumano denied that the agreement approved Wednesday would produce the same windfall for his company, amounting to millions of dollars.

Commissioner Betty Fisher voted against his request. “Quite frankly, I’m antagonistic to the whole thing,” she said. Trading condominiums for single-family homes is “like promising people caviar and giving them eggs--they’re still eggs, but there’s a difference,” she said.

But Commissioner J. Paul Robinson praised the agreement because it would provide more units for moderate-income families. Commissioner Sadie Clark also supported Valencia Co., but said she feared that the public would misinterpret the commission’s action. The aim was to provide more moderate-income housing, not to save the developer money, she said.

Clark also feared that speculators would purchase the Castaic houses and then sell them later at highly inflated prices. At her urging, commissioners said the 75 houses and 25 of the condominiums must be reserved for moderate-income families for at least 10 years through deed restrictions on resale prices.

The Santa Clarita City Council, reversing a position by the city Planning Commission, endorsed the Valencia Co.’s proposal May 25. Council members praised Valencia Co. as a good corporate citizen and noted that the company--unlike others--agreed not to ask for a refund of $6 million in local school taxes after the fees were ruled unconstitutional by the state Supreme Court.