Gauging Simi's economic forecast
By Darleen Principe darleen@theacorn.com

Simi Valley's economic future appears bright, this despite the continuing slump in the nationwide housing market and the decreasing availability of local vacant land, according to Brian Gabler, assistant city manager in charge of economic development.

With Simi Valley approaching complete build-out in accordance with the General Plan, the city in the near future will have to find other sources of revenue to fill an economic gap that was previously being fulfilled by new housing developments while the city was still in a growth mode.

Gabler said he's seen a slowdown in the sales of new homes locally, but also said the slowdown isn't typical of the city as a whole.

"There's still going to be a demand for housing in Simi Valley," Gabler said. "There are still a lot of people who want to live in Ventura County, and we still have the opportunity to provide housing for the person who wants to live in the type of environment Simi Valley has to offer."

According to a report submitted last November by the U.S. Department of Housing and Urban Development, the American housing market continued to weaken in the last quarter of 2007 as new home sales further declined and housing affordability was worsened by increasing mortgage interest rates.

Locally, some of Simi Valley's newer developments or proposed residential projects, such as the approved Larwin Co. development off the 118 Freeway at Kuehner Drive, have run into some recent glitches in relation to the housing crisis. In November, Larwin halted the construction of 66 condos adjacent to Simi's Happy Face Hill, and announced it would reassess the market this spring before continuing to build.

But other developers, such as Casden Properties LLC, continue to push forward with their proposals in hopes of filling certain needs such as senior, workforce and affordable housing, in the community.

The Casden project, which calls for the construction of 266 for-sale residential units on a 16.8-acre site off Madera Road and Los Angeles Avenue, was approved by the planning commission in December and will be heard by the City Council later this month.

Gabler said that when trying to understand the behavior of the local market, it's important to look at the primary needs of the community.

"There are several different types of persons looking for houses," Gabler said. "There's the new homebuyer- who hasn't had a home before and can't jump into an $800,000 house, so they'll be looking for workforce housing around $400,000 to $600,000.

"Then you've got the buyer that's trying to take the equity out of their current home and use it to move up to a larger home. We also have the outofarea buyers. The key is to look at the different types of persons who are trying to buy houses here now."

Alternate forms of revenue

With the current housing conditions and the Casden project being slated for the last major piece of vacant land in the Simi Valley, city officials can expect to see some changes in the local economy in the near future.

"Simi Valley always utilized development revenues to meet budget demands," Gabler said. "But we saw years before that the development revenue was going to start declining, in terms of being able to fund city services."

Still, Gabler is optimistic about the city's economy, partially because of steady sales tax coming in from the Simi Valley Town Center and the continued proposals coming to the City Council for other commercial enterprises.

"The Simi Valley Town Center is meeting and exceeding expectations in a number of ways," he said.

"It's meeting expectations with regard to sales tax revenues. It's exceeding expectations in filling gaps of the availability of quality restaurants and shopping, and it's providing a meeting and gathering place for the community.

"The mall has brought nothing but positives to the city of Simi Valley and its residents," Gabler said.

In the long run, the city is likely to see other types of construction take the place of new all-residential projects.

Mixed-use developments, such as The Market Place town home and boutique shopping center off Tapo Street, may become more common throughout the city, Gabler said.

He also predicts more rehabilitation of older, established commercial centers.

Retail giant Target Corp., which recently bought the former Kmart plaza on Tierra Rejada Road, plans to rehabilitate the entire site- generating some new consumers and stimulating the economy, he said.

"Because opportunities will be gone for new developments, new retailers that still want to be in Simi Valley will have to find other locations," Gabler said. "The idea is that those retailers will fix up their part of a shopping center and the rest of the (center) follows suit."