Hurdles to housing: With economy recovering, experts say High Desert must be prepared for growth

 Panelists Steve Ruffner with KB Homes (left), John Reeder with Mimi Song Company (middle) & Beau Cooper with United Engineering Group (right) speaking at the High Desert Luncheon in Victorville Wednesday, March 21, 2018

Panelists Steve Ruffner with KB Homes (left), John Reeder with Mimi Song Company (middle) & Beau Cooper with United Engineering Group (right) speaking at the High Desert Luncheon in Victorville Wednesday, March 21, 2018

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By Rene Ray De La Cruz
Staff Writer, Daily Press - Posted at 9:37 AM

VICTORVILLE — The High Desert is a hotbed for potential growth in the housing industry — but poverty, rising building costs and government bureaucracy are some the roadblocks to recovery.

That was a portion of the message delivered during the High Desert Marketing Forecast and Networking Luncheon on Wednesday that welcomed industry leaders in development, real estate and economics.

Hosted by the Building Industry Association of Southern California, Baldy View Chapter, civic leaders from across the High Desert were also in attendance, as well as those affected by the building industry such as Casey Armstrong, the owner/president of Armstrong Fairway Insurance, and Paul Baldridge with Barstow Transfer & Storage.

Mayor James. T. Butts Jr. also brought a message of economic hope to the room when he shared how Inglewood went from a “city of foreclosures” to a city where home sales prices nearly doubled to over a half-a-million dollars since 2012.

“We hope this gathering is a starting point to meet the growing housing needs in our market,” BIA CEO Carlos Rodriguez said. “In my 14 years with the BIA, I’ve never been this optimistic, but we do have some barriers that confront us.”

Some of those barriers include a poverty rate of nearly 19.5 percent, an expected housing shortage of 65,000 homes in San Bernardino County by 2019, not meeting the needs of millennial buyers and government bureaucracy at the state and local level.

MetroStudy Southern California Regional Manager John Mulville said the “economy is recovering” with no recession in sight, adding the High Desert need to “prepare” for the recovery.

“We need to create a strong housing market in the High Desert or companies won’t move to this area,” said Mulville, who revealed 83,000 new homes are needed yearly in Southern California, with a predicted shortage of nearly 20,000 annually through 2022.

Mulville was the moderator for one panel discussion that included Home President Regional General Manager Steve Ruffner, United Engineering Group Entitlement Manager Beau Cooper and Mimi Song Company Chief Executive Officer John Reeder.

The panelists agreed that many cities have slowed the building application process to up to two years, while some municipalities are streamlining the process to 90 days.

“We’re going to go where the time frame is the shortest,” Ruffner said. “Nobody wants to be stalled by city hall.”

 Panelists Terri Rahhal with the San Bernardino County (left), Scott Nassif, Town of Apple Valley Councilman (middle) & Eric Negrete, City of Victorville Councilman (right)

Panelists Terri Rahhal with the San Bernardino County (left), Scott Nassif, Town of Apple Valley Councilman (middle) & Eric Negrete, City of Victorville Councilman (right)

The panelists also shared that smaller homes on smaller lots are what millennials desire, a message emphasized by Reeder, who jokingly said, “You guys are bad designers of homes. Our survey tells us people want smaller homes, but you aren’t listening to us.”

Apple Valley Mayor Art Bishop told the panelists the “800-pound gorilla in the room” was the California Environmental Quality Act, with its environmental impact studies that slow the building process.

“If we all get together, we can straighten CEQA out,” said Bishop, with Ruffner responding with, “If you want to run for governor, I’ll back you.”

Butts Jr., who has a combined 39 years in public safety, municipal government and education, shared videos that illustrated how he played a part in luring the NFL to build its nearly $2.6 billion, 70,000-seat stadium in his city.

Inglewood faced an $18 million structural deficit seven years ago, with an impending cash flow bankruptcy and cash reserves of nearly $13 million. Today, Inglewood has $58 million in cash reserves, has seen its median homes price rise by 137 percent since 2012 and has seen its crime rate plummet by 70 percent over the last 40 years.

Butts Jr. attributes “a focus on economic development” as one of the many reasons why Inglewood is “rising” to prominence once again.

“One of our responsibilities as a municipality is to be a partner with economic development,” Butts said. “Cities that don’t see themselves as partners in economic development are going to have a real disconnect with the people who cause the economy to surge and the people who can put the brakes on everything that happens.”

The Metro Study also revealed the leading builder in 2017 in the High Desert was Del Webb with 117 units, followed by KB Home at 58, Legacy Homes with 33, Evergreen Homes with 21 and Express Homes with 17.

D.R. Horton, who operates Express Homes and Freedom Homes, recently purchased 337 lots in Victorville, with a “second major builder” possessing a nearly 100-lot development in escrow.

“Development is the lifeblood of the city,” said Gordon Lee Nichols Gordon Lee Nichols, senior director of the BIA. “When a city stops growing the body dies — development and new investment are critically important.”

Reporter Rene Ray De La Cruz may be reached at 760-951-6227, RDeLaCruz@VVDailyPress.com, Twitter @DP_ReneDeLaCruzand Instagram @reneraydelacruz