EDITORIAL THE VALLEY'S PROSPECTS MIDDLE-CLASS MECCA IS ENDANGERED BY GOVERNMENT INACTION.

THE economy is in the tank, the schools are in poor shape, crime is on the rise and traffic is insufferable.

Still, most residents believe the San Fernando Valley is a fine place to live - as well they should.

Whatever its problems, the Valley manages to hold on to its reputation as a diverse, middle-class mecca with a heavenly climate, a place where families can live and thrive in suburban comfort with easy access to all that a big city has to offer.

That's why 71 percent of Valley residents rate their quality of life as excellent or good, and why 85 percent are optimistic about the future, according a survey conducted for the Economic Alliance of the San Fernando Valley, which held its annual summit Wednesday.

But the quality of life that's attracted families to the Valley for a half-century is threatened by L.A.'s neglected problems, most notably the skyrocketing price of housing and the city's unfriendly business climate, according to the Alliance study.

Because population growth in the Valley has long outpaced housing supply, the price of a home has soared beyond the reach of most families. Although most Vals want to live in single-family homes, the median price for such dwellings has swelled to an astronomical $330,000.

Former U.S. Housing and Urban Development Secretary Henry Cisneros, who spoke at the Alliance's summit, has observed firsthand the massive and unmet demand for Valley housing. Since rejoining the private sector, Cisneros has worked to meet that demand by developing residential units in the Valley that, he reports, have sold like hotcakes.

But Cisneros' success story is an isolated one. For decades, neither the city nor the county has had any coherent plan for growth. Recent residential developments in the Valley have consisted mostly of infill, with little thought given to infrastructure or community concerns.

Meanwhile, city officials have promoted the densification of the Valley, replacing the housing tracts that Vals want with tenements that are all they can still afford. This policy, coupled with mounting crime and poorly performing schools, has contributed to a massive flight of middle-class families to outside the Valley.

Like middle-class families, corporations have also fled L.A., in no small part because of the city's punitive and convoluted business tax.

These problems all build on and compound one another.

The lack of good jobs forces Angelenos to endure long commutes, thereby adding to the city's infamous traffic woes. Business and sales tax revenues generated elsewhere never make their way into city coffers, and so the Los Angeles Police Department remains undermanned.

Then there are the public schools, which are improving after two decades of decline, but contribute greatly to middle-class flight.

Many of these problems are rooted in the failures of local government. No wonder Valley residents, despite being satisfied with their own quality of life, give low marks to the mayor and City Council.

The San Fernando Valley is still a great place to live. Keeping it so for generations to come has been at the heart of our fight with City Hall and the LAUSD leadership.

The Economic Alliance's summit adds new data that ought to serve as a wake-up to the city's elected leaders that fixing potholes isn't enough. What's needed is a citywide summit of leaders from all communities to develop broad policies on growth and redevelopment, city tax and spending policies, transportation and all the other issues that have been ignored for far too long.