Staving Off the Ghosts of Jan. 17 : Loan plan would boost crippled neighborhoods

Because rebuilding their Sherman Oaks homes after the Jan. 17 earthquake seemed too arduous, members of a condominium association have decided to move on. The ripple effect from loss of these consumers will feel like a tidal wave to nearby businesses striving to survive or weighing whether to reopen.

Situations such as this have fueled fears of economic “ghost towns” in quake-ravaged parts of the San Fernando Valley and other Los Angeles areas. Now those concerns have spurred Mayor Richard Riordan to call for an ambitious rebuilding plan in which at least $150 million would be loaned soon to property owners and banks for rapid repairs. The key beneficiaries would be those who otherwise might give up on rebuilding homes, particularly large apartment complexes.

Most of the funds would come from U.S. Community Development Block Grants originally designated for social services and public-structure repair. About $50 million would come from federal housing repair monies and $30 million from city-issued bonds. Flexibility in this matters has been granted by federal Housing and Urban Development Secretary Henry G. Cisneros.

If the mayor, a shrewd businessman, feels that loans can help revitalize neighborhood economies, the plan certainly is worth a try.

A prime motivation can be found in the Loma Prieta earthquake in Northern California: Almost five years later, many damaged communities still are struggling to recover economically.

The Los Angeles City Council, whose approval is needed, must quickly study the proposal with an open mind and awareness of potential downsides. The proposed approach is untested; also, the plan might be turned aside by communities or officials who felt left out. However, an argument for experimenting is that if the plan works in areas bearing the brunt of the worst quake in L.A. history, it surely could be made to work almost anywhere.

Important to any finely tuned rebuilding effort is a close look at why areas like Sherman Oaks sustained more damage than some neighborhoods closer to the quake epicenter. The Ventura Boulevard area’s preference for “soft story” construction, for example, in which a building’s first floor is its parking garage, contributed to the massive damage there; soil conditions were another factor.

Whatever heightened the damage, Riordan is right to seek a quick infusion of cash into once vibrant communities that otherwise might be consigned to slow, spreading decay.