Housing called linchpin to economic success in Valley. (Up Front).

City and state lawmakers were put on notice recently that, as they grapple with any Valley economic issues, their concerns should center on the area's acute shortage of affordable housing.

Despite what appeared last week to be shaping up as a prolonged war in Iraq, the Valley economy is headed for a rebound, albeit a slower one than expected a few months ago, according to a panel of economists and business leaders who spoke at the March 26 "Info Summit 2003," presented by the Economic Alliance of the San Fernando Valley.

Entertainment jobs are said to be on the rise, unemployment rates are falling for the first time in two years, and, a majority of residents polled for a survey on the state of the Valley regard the quality of life here as either excellent or good.

But the lack of affordable housing threatens to impact the Valley business community sharply and the issue played out as the summit's overriding theme.

Unless state and local regulations are altered to make it easier for developers to compete with commercial projects for what little land there is left to build on in the Valley, there won't be enough housing to go around to accommodate expected population growth over the next decade.

And most of that growth is corning from an ongoing influx of immigrants into portions of the Northeast Valley, where the gap between housing supply and demand is most critical.

Rising median home prices coupled with record-low interest rates are making things easier for those in the upper median income brackets to purchase their first homes or refinance. But for the wide majority of those in the poorer areas, economists say, those conditions, combined with a lack of housing, only work to price immigrants right out of the market.

Liam McGee, president of Bank of America California and chairman of the United Way of Greater Los Angeles, one of four speakers at the summit, said tight regulatory control over building permits as well as business taxes and licensing fees are hamstringing the building industry here and across the sate.

The average median home price in the Valley rose 15 percent in 2002 to just over $300,000, yet the area is experiencing its lowest inventory in three decades.

"Plain and simple, we just can't build enough houses in Southern California," McGee said.

Effect on businesses

Businesses in all categories are impacted because there is a direct link between housing availability, the quality of life for workers and the draw of other businesses into the area.

McGee and others, including Henry Cisneros, chairman and chief executive of American City Vista and former secretary of the U.S. Department of Housing and Urban Development, called on business owners to ratchet up lobbying efforts at the city and state levels for more funding for housing developments and land re-use projects.

The housing crisis "is not a sideline," said Cisneros, whose company has teamed up with developers across the country to secure funding for construction of affordable housing communities with links to transit and urban centers -- three of which are now in the Valley.

Cisneros conceded that density across the Valley is a key issue, particularly in communities such as Chatsworth, where horse property owners, among others, have waged a bitter campaign against multifamily developments.

But he maintains urban in-fill, coupled with smart re-zoning policies would work to alleviate the shortages.

"There are few sites left in the Valley except for sites that have challenges," Cisneros said. "And all of those challenges have to do with density."

Matching funds for housing developments from Prop. 46 are still slow in coming and projects set to benefit may not get green-lighted for sometime. And, although Mayor James Hahn's Housing Trust Fund, is expected to grow to $100 million over the next few years, Cisneros, McGee and other summit presenters say more than money needs to be brought to the table.

What it's going to take, they say, is pressure: pressure on city officials to change density codes to free up land now zoned for commercial use, and pressure on Sacramento, which the four panelists agreed, has grown increasingly hostile toward California businesses.

"In the Valley, the housing market is the Hispanic community," McGee said.

Also presented at the summit were the results of the Third Annual Survey of the San Fernando Valley, conducted by the Rose Institute of State and Local Government at Claremont McKenna College.

The poll revealed that while support for Valley secession has dwindled from a year ago, faith in city hail remains in question.

Of the 800 Valley residents polled for the survey, 28 percent said they would support secession, compared to 40 percent in 2001 and 54 percent in 1999.

Nonetheless, performance ratings for Mayor Hahn were not good: only 29 percent of the respondents gave him an excellent or good rating, compared to just under 40 percent in 2001.

As for the entire city council, 40 percent of the respondents gave the panel an excellent or good rating, compared to 43 percent who rated the council at fair or poor.

Springing back

Separate economic forecasts, presented at the summit by Jack Kyser, chief economist with the Los Angeles Economic Development Corp. show the Southern California region faring better than the state overall.

In his report, Kyser predicted the Valley economy to limp back to normal by 2004 with anticipated growth of 0.8 percent to roughly 730,000 jobs for the area.

The rebound of the entertainment sector is expected to be among the strongest and the war in Iraq may be behind it.

Following a two-year lull fueled by a "defacto" actor and writers strike and the fallout of the tech-wreck of 2000, Kyser said entertainment-related jobs should increase by about 5,000 to total 127,000 and continue climbing well into next year. "It's not just Canada that we have to think about when we talk about run-away production anymore," said Kyser. "You have to also think about places in Europe, like the Czech Republic. That region is now a big filming area. But (due to war in Iraq) people don't want to put crews and casts at risk."

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