SCV NEWSMAKER OF THE WEEK:
Ray Pearl
Executive Officer, Los Angeles-Ventura Chapter
Building Industry Association

Interview by Leon Worden
Signal City Editor

Sunday, September 12, 2004
(Television interview conducted August 12, 2004)

Ray Pearl     "Newsmaker of the Week" is presented by the SCV Press Club and Comcast, and hosted by Signal Multimedia Editor Leon Worden. The program premieres every Wednesday at 9:30 p.m. on SCVTV Channel 20, repeating Sundays at 8:30 a.m.
    This week's newsmaker is Ray Pearl, executive officer of the Los Angeles-Ventura Chapter of the Building Industry Association. The interview was conducted Aug. 12. Questions are paraphrased and some answers may be abbreviated for length.

Signal: Who is the Building Industry Association? It sounds like the opposite of SCOPE.

Pearl: The Building Industry Association is made up of 400 home builders and anyone else associated with the industry — from your architects to your consultants to your lawyers to your carpenters. The objective of our association is to help our builders not only build homes, but (also) to build communities.
    We represent the home builders throughout the L.A. County and Ventura County areas. Our primary focus is Ventura County, the city of Los Angeles, and the Santa Clarita Valley.

Signal: Are these the highest growth areas?

Pearl: Those areas represent the areas in which the majority of our building is going on, and where our member companies are active.

Signal: Your Los Angeles-Ventura chapter is a part of the California BIA?

Pearl: We are actually a chapter underneath the BIA of Southern California, which is our regional entity, (which) represents the counties down here in the south other than San Diego. We're also part of our state association, the California Building Industry Association, and finally a member of the National Association of Home Builders. So our reach is from local all the way to federal.

Signal: Part of what the BIA does is to lobby for developer-friendly legislation in Sacramento, right?

Pearl: We call it home builder-friendly legislation. And home-buyer friendly legislation. In our state association, what we're doing up there is focusing on state legislation, and down here it's much more grass-roots, focusing on the communities in which our members are actually building homes.

Signal: How long have you been with the BIA?

Pearl: A little over six years.

Signal: It seems only recently that you've been seen at City Council meetings; why is that?

Pearl: Maybe the folks at The Signal have (only seen me recently), but we have been active up here in the Santa Clarita Valley for well before I got here, and certainly as long as I've been here. My job has evolved from simply just doing the government affairs work to, now, being responsible for the entire association. And we have been very active up here in the community, at the very least, I can speak for the past six years.
    It's of late where we have tried to raise our profile and become much more active as an association up here in the valley. The reason for that is very simple: We have serious issues, and it demands a serious debate, and it's time that we begin to tell both sides of the story.

Signal: Both sides of the development-versus-environmentalist story?

Pearl: No. I think that development and environmentalist, that's a story that goes hand-in-hand. What I'm talking about is the home-building, community-building story, and all that goes into that, versus what we consider to be an environmentalist-extremist side of the story.
    I think that's a very strong difference, because if you take look at the communities that we're building today, it's not just about building a home, it is about building a community — that includes schools and parks and roads, protecting the environment, preserving oak trees, preserving open space. And it is really about building a community that is tune with quality-of-life issues that new home buyer and the existing community are willing to accept.
    That is all compatible with a very reasonable environmental agenda. It can coexist. And what you have found up in an area like this, in our opinion, is a very extreme minority voice that needs to be countered, and we need to educate the population of the valley as to the other side of that story.

Signal: How much more growth can the Santa Clarita Valley sustain? We've got over 210,000 people here now —

Pearl: I don't have population figures for you. You know that the city of Santa Clarita itself is on the verge of build-out. There's not much land left for new building. What you'll see in the city will become a renewed focus on infill development, and as a city matures, that's eventually where it goes, to where you're reusing land.
    As far as the unincorporated parts of Los Angeles County, out here in the valley, the biggest project that we have has already been approved, and it's something that is going to come online over the next 10 to 15 years and begin to continue to provide homes for our ever-growing population.

Signal: You're talking about Newhall Ranch.

Pearl: Yes.

Signal: Which will add 70,000 people. Do you see that we'll have enough roads and freeways to accommodate them?

Pearl: I think that part of any responsible community, and any master planned community, from the largest down to the smallest, is ensuring not only you get that home built, but that you pay attention to other issues. It's part of every new home and every new community that you have to examine the impacts, and those impacts are everything from providing the schools, ensuring that the infrastructure is there, working with the community to (build) the cross valley connector, and ensuring that we do have the roads available to sustain the great quality of life that Santa Claritans currently enjoy.

Signal: How do you see the home builders' responsibility to plug the state's housing deficit? California needs 250,000 new homes every year, but only about 125,000 are coming online each year statewide.

Pearl: This year we are going to hit almost 200,000. That is the projection. And that will be the first time that we have come that close since the late '80s.
    We have a housing crisis in this state. We have a very desirable place to live, and we have huge undersupply of housing from San Diego north to the Oregon border. We need more housing. And it's not just here in the Santa Clarita Valley, it's not just here in Los Angeles County, and our home builders stand ready to provide that housing. It's a difficult process and it's one that requires great oversight, and we welcome the oversight. Our responsibility, at the end of the day, is to provide a quality community that you and I would like to live in.

Signal: It certainly seems from appearances that there is a lot of new-home construction happening in the SCV, particularly in the unincorporated county areas. Do you think we'll see the supply catch up with demand?

Pearl: The city of Santa Clarita, as I said, is built out. If you look at the valley itself, it is certainly going to continue to add communities. But if you look at the statewide figures that we looked at earlier, and this huge undersupply of housing — we had a recession in the early '90s that took us a long time to catch up to, and it wasn't until the late '90s that we began to see home-building increase again. What you have from those years is a huge undersupply of housing in communities throughout the state of California, and the reality is, you cannot argue about, "Will growth happen?"
    We continue to have a huge increase of births over deaths; we have a lot of people who find California a desirable place to live. Thank goodness the people who came before us chose to plan the way they did so that we all have a home to live in. That is what we need to continue to do, is to ensure that we are meeting the demand for shelter in our community.

Signal: Why isn't there enough affordable housing in this valley?

Pearl: The unaffordability begins with availability, and that is what it boils down to. We don't have enough supply, and if you just take Econ 101 and look at what happens when you have a huge demand and not enough supply, you're going to raise the price of that good, whatever that good is. Where housing is concerned, you not only have the supply-demand equation, but in the state of California you have a unique set of building circumstances — and that is homes in the state of California can truly say that they pay their own way.
    When you build a new home, what goes into the price of that home would amaze your readers. You are paying for schools. You are paying for the water infrastructure. You are paying for roads. You are paying for all parks and open space. There's so much that goes into providing that home before that person gets the key. That makes housing more expensive in this state
    The other thing that you have is an extreme — again, what we say is an extreme view that lawsuits are a way to prevent growth. Every lawsuit adds to the price of a home. Every delay that you have makes it harder to build that home. That is part of what leads to the undersupply, and it's part of what leads to the economics of providing communities today. Unnecessary and burdensome lawsuits make it more difficult to build.
    And yet, to see the faces of that new home buyer as they walk in the front door for the first time, and to really enable (them) to achieve that American dream of home ownership — that is why I think that so many people forget that we are providing that American dream and we are providing a community that folks can be proud of, and they go home at the end of the day to create those family memories.

Signal: Is that what drives you? Creating the American dream for people?

Pearl: I am passionate about the home-building industry. I am proud of what I do. I am proud of what my members do. We are about providing the shelter that you and I live in, and then hopefully —ŬI have two young children. They are four and 16 months, and my hope is that my members are building the home that they will be able to live in.
    Out here in the Santa Clarita Valley you have young demographics. There are a lot of young families out here. The hope is that we can continue to provide that American dream so that the current generation and the future generations are able to live in that home. That is what I enjoy about my job, is that it is not just a job that someone has hired me to do; it's a job that I believe in. It's a group of men and women that I believe in, and a cause that I believe is just and reasonable.

Signal: What does the BIA offer its builder members that an organization like the chamber of commerce can't?

Pearl: It is our focus on one issue. ... I say "one issue" — it's housing, but everything that goes with that. And it's that sense of belonging that those who belong to our association are in some way ... attached to providing housing. So, I think it is that sense of belonging and issues surrounding home-building, and it's an opportunity for our members to get together and understand the challenges that each other is facing, and celebrating our successes.

Signal: A lot of those lawsuits you mentioned pertain to endangered species. Where is the balance between the environment and the need for housing? Do you see validity in desire to save a species that may be on its last legs?

Pearl: The answer to that is, there is a balance. Home-building and land developing today is incredibly complicated, and from our members' perspective, it's responsible. That's what they do today. They have all of these challenges, and what it boils down to is finding that balance — so not only are they paying attention to that frog or that toad or that flower and mitigating the impacts that you're going to have on it and providing the habitat and protecting the open space — but that we can coexist with our environment.
    It is not about taking species, it is not about harming the environment. It is about how we as a people ... coexist with our environment. The job of our home builders is to find that happy medium, working with the community, working with environmentalists, working with city councils and elected officials to find that balance and say, "Yes, we need housing. How do we get it done responsibly?"

Signal: The Newhall County Water District board, which represents Newhall and Castaic and the Pinetree area of Canyon Country, has declared that our valley's water availability figures appear to be skewed. They're concerned that there may not be enough water to sustain any more growth. What do you say?

Pearl: Certainly whether you're a currently resident in the Santa Clarita Valley or a future resident, and if you're a home builder providing for that future resident, providing a reliable and a clean water supply is of the utmost importance. And working with experts in the Santa Clarita Valley and throughout the state, we work to ensure that the communities that we provide, have water. Without water you do not have a sustainable and viable community.
    Where Newhall County Water District is concerned, we respectfully disagree. The only reason we disagree is because all we can do is rely on water experts. We are not water experts. We rely on people and scientific evidence and scientific data and facts. We cannot rely on rhetoric and politics and political agendas. And looking at cold, hard facts, they say — water agencies throughout the state say — there is a sustainable amount of water. The water districts — you've got to remember, they exist to provide water for current and future users. That's (in) their mission statement. If a water district, whoever that water district is, says we don't have enough water, you need fulfill Part 2 of your agenda: Identify water supplies and ensure that you can supply for future residents.

Signal: In other words, it's their job to go find the water?

Pearl: It's their job to go find it.

Signal: Where are they supposed to find it?

Pearl: Again, we've got to rely on the experts to do that. Our job, at the end of the day, is that when a community comes on line, there needs to be water. There's not a single responsible home builder in the Santa Clarita Valley that doesn't believe that. Water is critical and water is important.
    Unfortunately, what has happened is that it has become the latest issue du jour to mask a no-growth agenda, and if you can attack water and you can say you're turning off the taps, you can't provide the house. We say, we need to provide the housing, we need to build a better Santa Clarita. We need to build communities for our homes, communities for our residents. And if you say you're going to turn off the tap — don't forget, you're harming the quality of life in this region, and I think you're doing it unnecessarily.

Signal: Do you believe the environmentalists'' arguments about water and toads are incidental to their "real" goal of stopping growth?

Pearl: I believe that the Santa Clarita Valley is full of responsible environmentalists. I think you would find, among our home builders, responsible environmentalists, people who identify themselves that way. There's no home builder today that takes on building a new community without taking into consideration their responsibility to the environment.
    As far the opposition, if you will, we have serious issues, and it requires serious leadership, and it requires serious dialogue. Pointing fingers and pulling-up-the-drawbridge attitudes simply will not work. We're putting our heads in the sand if we think that if we stop building, they won't come. Not only are they coming, but they are already here. And so to use water as an issue to stop growth, I think it's disingenuous. We need to ensure that we have a safe, reliable drinking water supply, and we look forward to continuing to work with the experts to make sure that happens.

Signal: If you think the arguments of your "opponents" are disingenuous, why do you think they want to stop growth?

Pearl: I think that they view growth as change, and there are certain segments of our society that have theirs and don't want anyone else to have it. What we represent is ensuring that people have a place to live, that people have a place to call home, that they can achieve that American dream of home ownership, and that at the end of the day they have a safe, secure, happy place to go home to.
    If you're going to say, "No more growth, we're done," you are really putting your head in the sand, because our population continues to grow. People find this a desirable place to live. Again, I talked about births over deaths; our population is increasing, and I think that to stop home building would be to degrade the quality of life for those of us who are here.

Signal: You mentioned that your more visible presence is tied to wanting to give the builders' side of the story. Have the local environmentalists become effective to the point where you feel it's necessary to countermand them?

Pearl: No, they certainly play a role. They say what some might say constructive — they play a valuable role in the community; they have a voice. And whether it's SCOPE or any other environmental organization, their opinion needs to be respected. But what we're trying to bring to the table is to elevate the dialogue. It shouldn't be about frivolous lawsuits, it shouldn't be about stopping growth at every turn. It should about what we talked about earlier, and that is to find a way for new homes and new residents to coexist with the community and the environment.
    By having me come out and appear on a show like this, it's to let the residents of Santa Clarita know that we have a responsible community and responsible group of home builders that want to provide housing for an ever-growing population, and it is not about stopping growth because you find water to be the issue, or you find another issue that you can stop that a lawsuit delays and delays. We need to find a way to coexist, and we need to elevate the dialogue. Serious issues require serious dialogue, and we want to be a part of that.

Signal: What can the city and county be doing to address the need for good housing and community development?

Pearl: It comes down to education. It comes down to not believing that the sky is falling because a new home is being built next to you. And the reality is that in a society like ours, we need to look out for each other. Not everyone in Los Angeles county can afford to buy a home. And a lot of that, again, has to do with supply and demand and the desires of people to live here.
    We need to be able to build homes and we need to be able to do that responsibly. That involves the entire community. No matter your opinion on growth, no matter your opinion on new homes, your opinion should be welcome. And that opinion should be from the City Council and our elected leaders, it should be from our environmental community, it should be from our neighborhood groups and our town councils. Everyone should have a voice in how this valley grows.
    We want to make sure that we have that voice. We encourage the City Council and our Board of Supervisors to also have that voice. But again the reality is, there is an inevitability where growth is concerned. We continue to have kids; people continue to move here. We want to make sure that we're able to build those homes, and we want to make sure that we do it responsibly in a way that enhances the quality of life.

Signal: Besides environmental lawsuits, what are the biggest challenges you see facing builders and potential home buyers in the Santa Clarita Valley?

Pearl: It's about getting the homes built and getting them built in a reasonable time frame. It's very interesting that when you talk to members of the community who are looking for a home, (they) don't know a lot about the process. Our builders have waiting lists for new communities that are thousands of people long. We can't build the homes as fast as people want to move into them. So our goal and our job is to ensure that we can continue to provide housing for those that are desperate for it.
    You're going to face some challenges over the next couple of years, whether it's going to be increased lawsuits; you also look to interest rates and how the economy might impact our industry. But the reality is that we need more housing, and as long as our members are out there and allowed and able to do it with proper oversight and proper community involvement, we will be able to address the housing crisis head-on and hopefully provide a community that those who live in Santa Clarita can be proud of.

Signal: In the next 12 months, will we see new homes come online faster, and home prices continue to decline?

Pearl: I think you're going to see more homes come online, I don't know that it's going to be necessarily a huge increase. I mean, statewide, we continue to be able to build — not yet to previous levels, but we're getting there.
    As far as home prices go, that's for an economist to answer. I don't think you're going to see a bubble. I think what you're going to see is maybe a settling out of home prices. The market is still strong; the demand is overwhelming, and like I said, as fast as our builders put those homes up is as fast as they sell.

    See this interview in its entirety today at 8:30 a.m., and watch for another "Newsmaker of the Week" on Wednesday at 9:30 p.m. on SCVTV Channel 20, available to Comcast and Time Warner Cable subscribers throughout the Santa Clarita Valley.


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