Reg­u­la­tions and lo­cals can make it more dif­fi­cult for new res­i­den­tial projects.

Los Angeles Times - - HOT PROPERTY - By Tif­fany Hsu

Few res­i­den­tial prop­er­ties are as de­sir­able as South­land surf and turf, or as dif­fi­cult to de­velop.

In the ocean-hug­ging com­mu­ni­ties stretch­ing from Mal­ibu to Dana Point, builders face in­tense de­mand for lim­ited space, re­sis­tance from reg­u­la­tors and res­i­dents, and lo­gis­ti­cal and en­vi­ron­men­tal chal­lenges.

“This will al­ways be some of the most cov­eted real es­tate in Cal­i­for­nia,” said Wil­liam A. Witte, chief ex­ec­u­tive of real es­tate com­pany Re­lated Cal­i­for­nia. “Be­cause of that sup­ply and de­mand im­bal­ance, the cost of land has es­ca­lated sig­nif­i­cantly.”

Still, some seaside ar­eas are un­der­go­ing bursts of ac­tiv­ity.

Playa Vista — home to of­fices for Face­book, Google and Mi­crosoft — has new res­i­den­tial units for sale in the Run­way mixed-use com­plex as well as dozens of condos in the Sea-bluff project set to be com­pleted in 2018.

In Ma­rina del Rey, de­vel­oper AMLI is wrap­ping up con­struc­tion on 585 res­i­den­tial units. The $165mil­lion devel­op­ment, which broke ground two years ago and is de­signed to look like a boathouse, also fea­tures out­door ar­eas and a re­tail com­po­nent.

In San Pe­dro, the first of 676 sin­gle-family homes, condos, flats and town houses in the High­park hous­ing plan is slated for com­ple­tion this year, with the rest set to be fin­ished by 2021. Ini­tial plans to build 2,300 homes quickly met with con­tro­versy and were scaled back.

Hunt­ing­ton Beach is par­tic­u­larly busy. The Pa­cific City com­plex broke ground in the fall af­ter a fraught, decades-long devel­op­ment process and this year be­gan wel­com­ing ten­ants into the first of its 516 luxury units. The res­i­dences, mar­keted as “clas­sic South­ern Cal­i­for­nia beach liv­ing,” are part of a re­tail and hos­pi­tal­ity project spread across 31 acres and three de­vel­op­ers.

De­vel­oper Sig­nal Land­mark wants to build 36 town homes at its Wind­ward project. The site for Shea Homes’ Park­side Es­tates, which will fea­ture 111 sin­gle-family homes, is un­der­go­ing grad­ing and in­fra­struc­ture in­stal­la­tion. Near the Bella Terra mall, the 510 dwellings of Pedigo Prod­ucts’ Mono­gram Apart­ments plan are half­way through con­struc­tion.

Sev­eral more projects — mixed use, town homes, sin­gle-family homes — are also in the works in Hunt­ing­ton Beach. Many plans in­clude pro­vi­sions for habi­tat preser­va­tion and parks.

Be­cause of the higher cost to live by the beach, such prop­er­ties are bought more of­ten by wealthy baby boomers look­ing for re­tire­ment res­i­dences and sec­ond homes. Around Santa Mon­ica and Venice, the tech in­dus­try is at­tract­ing an in­flux of young pro­fes­sion­als hop­ing to par­tic­i­pate in the start-up scene.

But there’s not much room to grow. Of­ten, only luxury de­vel­op­ers are able work out prof­itable mar­gins, and then only by pair­ing with the govern­ment or by craft­ing mixed-use pro­pos­als that com­bine res­i­den­tial units with re­tail and en­ter­tain­ment op­tions.

“Af­ford­able hous­ing by and large is not eco­nom­i­cally vi­able on ex­pen­sive land,” said Stu­art A. Gabriel, di­rec­tor of the Zi­man Real Es­tate Cen­ter at UCLA.

Win­ning govern­ment per­mis­sion is also dif­fi­cult. The Cal­i­for­nia Coastal Com­mis­sion has purview over ocean­side devel­op­ment, and de­vel­op­ers said the agency tends to fa­vor projects that are open to the pub­lic — such as ho­tels and re­tail out­lets — over pri­vate res­i­den­tial build­outs. Ap­provals, al­ways dif­fi­cult to

get, are even more of a strug­gle now, Witte said.

Re­lated Cal­i­for­nia wrapped its most re­cent South­ern Cal­i­for­nia coastal project three years ago in Santa Mon­ica, with help from the city. The Ocean Av­enue South com­plex — the first to be built on Ocean Av­enue in more than two decades — fea­tures condos and rental units.

“It was a hugely suc­cess­ful pub­lic-pri­vate part­ner­ship, but it was also unique and dif­fi­cult to repli­cate,” Witte said.

Many coastal res­i­dents are devel­op­ment shy, re­sist­ing con­struc­tion larger than a small clus­ter of homes and rais­ing con­cerns about traf­fic con­ges­tion and build­ing den­sity. Add in en­vi­ron­men­tally sen­si­tive ma­rine and on­shore habi­tats, and like­li­hood of res­i­dent-de­vel­oper clashes rises.

In New­port Beach, the pro­posed 900-home Ban­ning Ranch mixed-use devel­op­ment con­tin­ues to hang in limbo af­ter years of be­ing em­broiled in con­tro­versy.

The state Supreme Court in March or­dered builder New­port Ban­ning Ranch to amend its en­vi­ron­men­tal im­pact re­port be­fore con­tin­u­ing the project. And the com­pany sued the Coastal Com­mis­sion af­ter the agency de­nied the de­vel­oper’s lat­est plan in Septem­ber.

“Ban­ning Ranch is one of the last large, pri­vately owned and un­de­vel­oped coastal parcels,” said Terry Welsh, pres­i­dent of Ban­ning Ranch Con­ser­vancy, an en­vi­ron­men­tal non­profit that brought the case and hopes to pre­serve the prop­erty by pur­chas­ing it out­right. “There are just no more re­ally big lots left.”

In­creas­ingly, con­stituents are also con­cerned about cli­mate change and its ef­fects on the coast­line. Build­ing sites in Florida and New York al­ready fea­ture safe­guards against the ef­fect of global warm­ing and coastal ero­sion — South­ern Cal­i­for­nia con­struc­tion could soon fol­low suit.

Mark Boster Los An­ge­les Times

HUNT­ING­TON BEACH’S Pa­cific City com­plex is home to trendy restau­rants as well as new luxury res­i­den­tial ren­tals.

Christina House Christina House

THE MIXED-USE Run­way in Playa Vista has res­i­den­tial units for sale. Some­times such mul­ti­ple-use projects are a way to get a devel­op­ment ap­proved.

Anne Cu­sack Los An­ge­les Times

IN PLAYA VISTA, where Google and Face­book have of­fices, hous­ing sits above com­mer­cial space. Se­abluff, an­other mixed-used project in the community, is set to be com­pleted in 2018.

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