Dawn of a new century:
How Santa Clarita got here

By Leon Worden
Signal City Editor

Progress Edition, April 2001

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anta Clarita Valley growth wasn't always the divisive issue it has become. Once upon a time in this very land, growth was openly courted.
    When the business people and society leaders of Newhall formed the Santa Clarita Valley's very first chamber of commerce in the early 1920s, a top goal was to design publicity programs that would bring the area "to the attention of tourists and Angelenos and ... attract new residents," while exploring the "potential possibilities of Newhall for new enterprise and settlement."
    No doubt they reveled when the Bermite Powder Co., which would become an important asset in America's military arsenal, established a tract of homes along Walnut Street for their workers in the 1930s.
    This was certainly not the first concerted attempt at welcoming newcomers. The famed Prohibitionist Henry Clay Needham subdivided property in the heart of Newhall in the late 1800s for the purpose of establishing a "dry colony." But saloons outnumbered churches in this frontier hamlet, and the effort failed.
    Nonetheless the population reached 4,000 by 1940, and the Santa Clarita Valley was slowly on its way to making room for a lot more people.
    The growth effort got a shot in the arm after World War II.
    Waves of young recruits got their first glimpse of Southern California as they headed to bases in San Diego. Homeward-bound again, the victorious Iowa farm boys remembered the warm climates they'd found in sunny California. By the hundreds of thousands, they gathered their wives and young children and set out by train or automobile for a new life out West.
    The potential was not lost on the Los Angeles County Board of Supervisors. Unlike their counterparts in Ventura County, the supervisors decided to encourage property owners within Los Angeles County to transform their farms and ranches into housing developments.
    This they did by altering the property taxation structure in such a way that land would be taxed at its highest and best use. Parcels designated "residential" would be taxed at residential rates, even if their owners were still raising cattle or vegetables there.
    Land owners responded in kind. If they were to be taxed at residential rates, then residences they would build.
    Southland entrepreneur William G. Bonelli was first on the market after the war with a new tract of homes. At first just 15 units, Bonelli's "Santa Clarita" housing development was the first official use of the name that would come to signify the entire valley. Others followed suit. The North Oaks tract replaced the old Remi Nadeau ranch in 1961.
    It took awhile longer for the area's largest single land owner, The Newhall Land and Farming Co., to make the switch from ranching to home-building.
    Newhall Land President Atholl McBean took a hard look at the farming company's future in 1957, hiring an architectural team to design a comprehensive "new town" that would include all the dwellings, stores, job sites, governmental services, places of worship, medical and educational facilities and other amenities that a growing community of baby-booming families would need.
    There was more footwork to do. If the supervisors wanted massive growth and the landowners of the Santa Clarita and San Fernando valleys were to accommodate it, then the hordes of new residents would need new transportation routes and other infrastructure — notably, water.
    Governor Pat Brown threw the resources of the state of California into the effort, creating a freeway system that was second to none and convincing voters in 1960 to pass the largest bond measure in state history to bring water from the Feather River south to greater Los Angeles. Locally, property owners banded together and formed the Upper Santa Clara Water Agency, known today as the Castaic Lake Water Agency, to tap into the new State Water Project and ensure a reliable supply of potable water for a population that was about to explode.
    By 1967, the slogan, "Come Home to Valencia," was beckoning Southlanders and westward emigrants to buy a new tract home for just $25,000. The old farming company's new master plan started to take shape as a community college and industrial park opened in 1969, followed by an arts school and a major tourist attraction in 1971, and a regional hospital in 1975. County government services were consolidated into a new Civic Center, while Castaic and Pyramid lakes opened to store imported water for a thirsty Los Angeles.
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    Not having benefit of a single landowner with a master plan, the eastern half of the Santa Clarita Valley kept pace with the growth in the west but without the major hospitals, colleges — or roads.
    Local activists tried twice in the 1970s to break the Santa Clarita Valley away from what was characterized as a "distant" Los Angeles County government that failed to provide sufficient infrastructure — roads, parks, schools — to meet the demands of growth.
    County formation eluded them, but 10 years later, in 1987, the quest for "local control" bore fruit in the form of the city of Santa Clarita. Now, for the first time, the people of Santa Clarita could elect "their own" to make all of their planning decisions for them.
    Well, not quite all. The county-controlled agency that approves the formation of cities kept much of the valley's undeveloped land outside of the city and under the control of the same supervisors who approved development prior to the city's incorporation.
    Thus far, the city's requests for a "sphere of influence" to give it a formal role in the approval process for developments within the Santa Clarita Valley but outside of city boundaries, have not met success; however, this year, unlike in 1990, city and county officials are working together to craft a valleywide General Plan that will coordinate planning goals in both the incorporated and unincorporated sections of the valley.
    Today the greater Santa Clarita Valley is home to about 195,000 people, and the number is expected to more than double in the next 30 years, according to the Southern California Association of Governments.
    Statewide, the population is growing by 500,000 to 600,000 a year — primarily through births, and mostly in the southern half of the state. But new-home construction isn't keeping pace. While the governor and the building industry believe 250,000 new homes are needed across California each year to meet the demand, only about 150,000 homes were actually built in 2000, even fewer in prior years.
    "If California's economy is going to continue to grow and prosper in the new millennium, we not only will need new jobs for our growing populace, but the workers in those jobs will need homes — and they need to have homes they can afford," said Gary Cusumano, president and chief executive of Newhall Land, in an address to the California Chamber of Commerce.
    "High housing costs plus the unavailability of housing is one of the biggest challenges business, education and key government services face in trying to recruit high-caliber employees," he said. "If we don't have adequate, affordable and available housing for the workers for the new jobs we are creating, those jobs will move out of California, along with existing employers. We cannot let that happen."
    The city of Santa Clarita's General Plan includes target levels for low- and moderate-income housing, but there is no requirement that builders meet the targets. Today in Santa Clarita, prices in most new-home tracts start in the low $300,000s.
    Trends in the resale market illustrate the problem of availability. While sales of existing homes across the nation are flat or worse, Santa Clarita's real-estate market is sizzling. Records have been set recently in both the number of homes sold and in home prices, as the strong demand and short supply of inventory have combined to create a seller's market.
    "We expect sales to stay strong throughout 2001 simply because the region is so popular among buyers and you get so much more for your housing dollar," said Jim Link, executive vice president of the Southland Regional Association of Realtors.
    Realtors closed escrow on 3,765 existing single-family homes and condominiums in 2000, off just 3.6 percent from the record high set in 1999.
    Prices did set new records in 2000 — $242,975 for the typical single-family home and $136,475 for a condo, up 6.1 percent and 2.8 percent, respectively, over the prior year.
    "Cuts in home loan interest rates opened the floodgates on (an) exceptional market," said Nancy Troxell, president of the realtor group's Santa Clarita division. "Properly prices and prepared listings are selling very swiftly, with buyers sometimes stumbling over each other to be the first in line with an offer."
    Experts generally believe a healthy real-estate market requires at least a six-month inventory of existing homes on the market. Based on current prices, SRAR estimates that there is only a four-month supply — and new homes aren't keeping pace, despite a flurry of construction activity in the past year or two.
    "There is not a lot of new-home inventory available either," said John Reardon, president of Valencia Bank & Trust.
    The situation was different 10 years ago, Reardon said. When the recession hit in the early 1990s the inventory of homes and industrial space was too large; builders couldn't sell homes and construction ground to a halt.
    In the last six to nine months, "There have been definite signs that the economy is slowing down. (But) I do not believe this will be a recession."
    Federal Reserve Board Chairman Alan Greenspan "started trying to slow the economy down three years ago when he started rate increases," Reardon said. "It took awhile for that to happen. Now he is trying to stimulate the economy with rate decreases.
    "I believe that there will be a slowdown in development just as there has been in the general economy, but I don't see a recurrence of what happened in 1990," he said.
    Southern California is in a better position to weather economic storms than the rest of the nation, Reardon said. The Bush administration is committed to spending more on the defense industry, which is heavily concentrated in California; and Southern California is better insulated than tech-heavy Northern California against the downturn in technology-sector stock prices.
    "Over the past couple of years I've compared the economy to speeding down the interstate at 90 mph," Reardon said. "When you slow down to 65 mph, it feels like you're going 35 mph, but you're not."
    Marlee Lauffer, vice president of corporate communications for Newhall Land, said her company is bullish on the real-estate outlook for the coming months.
    "We are experiencing a tremendous increase in new-home sales in Valencia in the first quarter of (2001) compared to the same period last year," she said.
    "Obviously all of us remain focused on the economy, but the job-growth predictions for Los Angeles County are extremely strong. We are confident that that this area will remain attractive for businesses to relocate," she said. "We are very excited about the next several months as it relates to our business, in terms of industrial, commercial and residential home sales."

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