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Home My WebLink About0531 . ., � �r � •. AGENDA PALM DESERT PLANNING COMMISSION MEETING TUESDAY - MAY 31, 1977 7:00 PM - CITY HALL COUNCIL CHAMBERS * � * � * * � * * * � � * * � �c * � � * * * � * � � * � � * � * � * * * � * * � * * * * � * * * * * � I. CALL TO ORDER II. PLEDGE OF ALLEGIANCE III. ROLL CALL (Berkey, Kelly, Reading) IV. INTRODUCTION OF NEW PLANNING COMMISSIONERS V. SELECTION OF CHAIRMAN & VICE-CHAIRMAN TO FILL THE UNEXPIRED TERMS UNTIL SEPTEMBER, 1977 A. CHAIRMAN Action: Chairman Berkey B. VICE-CHAIRMAN Action: Vice-Chairman Reading VI. APPROVAL OF MINUTES A. MINUTES of the Planning Commission meeting of May 3, 1977. Action: Approved B. MINUTES of the Planning Commission meeting of May 17, 1977. Action: Approved VII. WRITTEN COMMUNICATIONS - None VIII. PUBLIC HEARINGS A. CASE N0. DP 07-77, �PALM DESERT VENTURE LTD. , APPLICANT Request for approval of a Development Plan Amendment to allow construction of 23 condominium units as a part of the Shadow Mountain Resort & Racquet Club, located east of San Luis Rey and south of Shadow Lake Drive. Staff Recommendation: Approve a modified Amendment by Planning Commission Resolution No. , subject to compliance with the Conditions of Approval. Action: Continued to June 14, 1977 � � � Agenda ' Palm Desert Planning Commission May 31, 1977 Page 7.tao VIII. PUBLIC HEARINGS (continued) B. CASE N0. CUP 05-77, RICK SEIDNER, APPLICANT Request for a Conditional Use Permit to operate a 1,240 square foot restaurant in the Harmon Building and a Variance on the parking re- quirement from 19 spaces to 8 spaces on a parcel located at the north- west corner of Portola Avenue and El Paseo. Staff Recommendation: Approve the Conditional Use Permit and the Variance by Planning Commission Resolution No. 244, subject to compliance with the Conditions of Approval. Action: Motion by Reading, second by Snyder, to approve Resolution No. 244. Motion carried unanimously. C. CASE N0. CUP OS-76, JOHNSON & BARBATTI, APPLICANTS Request for an Extension of Time for a Conditional Use Permit to operate a parking lot in an R-3(4) zone and a Variance for setback requirements. Staff Recommendation: Deny the request for an extension of time and a Variance by Minute Motion. Action: Reading moved, Kryder seconded, for a continuation to June 14, 1977. Motion unanimously carried. IX. OLD BUSINESS - None X. NEW BUSINESS A. DISCUSSION OF PROPOSED C.V.C.W.D. WATER LINE EXTENSIONS Staff Recommendation: By Planning Commission Resolution No. 245, find that the proposed projects are in conformance with the adopted Palm Desert General Plan. Action: Kelly moved, Reading seconded, to approve Resolution No. 245. Motion unanimously carried. IX. DESIGN REVIEW BOARD ITEMS A. REVIEW OF CASES ACTED ON BY THE DESIGN REVIEW BOARD AT THEIR MEETING OF MAY 10, 1977. Staff Recommendation: Approve the Design Review Board actions by Planning Commission Resolution No. 246 . Action: Kelly moved, Kryder seconded, motion to approve Resolution No. 246. Motion unanimously carried. , .. � � � � Agenda Palm Desert Planning Commission May 31, 1977 Page Three IX. DESIGN REVIEW BOARD ITEMS (continued) B. REVIEW OF CASES ACTED ON BY THE DESIGN REVIEW BOARD AT THEIR MEETING OF MAY 24, 1977. Staff Recommendation: Approve the Design Review Board actions by Planning Commission Resolution No. 247 . Action: Reading moved, Kelly seconded, to approve all cases except No. 58SA and 73MF, by Resolution No. 247. Unanimously carried. X. DISCUSSION ITEMS A. DISCUSSION OF THE DRAFT REGIONAL HOUSING ASSISTANCE PLAN PREPARED BY THE COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS. Staff Recommendation: Forward comments regarding the document to the City Council. Action: Continued to June 14, 1977 B. C.O.D. SPECIFIC PLAN Discussion of the Preliminary Draft of the College of the Desert Specific Plan. - Action: Continued to June 14, 1977 XI. ORAL COMMUNICATIONS Any person wishing to discuss any item not on the Agenda may address the Planning Commission at this point by stepping to the podium and giving their name and address for the record. Remarks shall be limited to a maxi- mum of five (5) minutes unless additional time is authorized by the Planning Commission. XII. COMMENTS A. City Staff B. City Attorney C. Planning Commissioners XIII. 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""t/rrLi BCN�J_ TRA/t`��•`J . . : � �ra�z � --'=----(C9rJcKyQ.ao )��B(/CKBMRO/ � � � r' '�^:.'cr�1_ � , 1 ��I.dR40W tP' To�/L TR.�_ ; � y`� o �=__=__=""=_=___=-�3" F � � �� t m�'±"' I � �Oi.IrAy��C�FI�IT/IFR�, q�� J V { r , T ✓'�•y`=�!i-'�R�iL � ' . _ � Q ..... a.. i ::�'�voRrocA avc! ►�� ♦ l � � wles�vmw o�. V�'I�-.._ ^�i-t1�r h '� V (! . . . . . ; 5 � �l � ��i�� N `\ �� --�� 11 W � r � \ w�,,�%z'�`'+�. i• '� � � � . i \r � 1��'i�' /� W . �L_5�.,�:.-ti�J�„� o j �` AQ471X�1 A✓i. ' l�l� ,�j � . j ,�; a 3 . . ,�. � � i f � �Oy ��~��1~� 4'` � _ � 1�� '��Rti ...,'�". I ! � c.v{.w. O�r.�......w•yt � 1 ti._ � � ' � `'r INTEROFFICE MEMORANDUM k City of Paim Desert TO: Hunter Cook, Jim Hill, � Bud Engel FR O M: Paul A. Williams, Director of Environmental Services SUBJECT: Land Division Committee Meeting DATE: May 20, 1977 There will be a Land Division Committee Meeting next Wednesday at 10:00 a.m. in the Council Chambers of Palm Desert City Hall. Your attendance would be appreciated. C , 1 '�� 1 '��`�—. PAUL A. WILLIAMS, DIRECTOR DEPARTMENT OF ENVIRONMENTAL SERVICES cc: Lowell Weeks - C.V.C.W.D. PAW/mj 1 f ' � � � . /�� a.s i�� J -- - _,�- - - ---------- --- - -- - - - - -- 'i_ . _ �u�a�' ,��r��rr� --L�_ �� i� � _ � - �� L�-_C��_c� ��s� - --- - - - , _ - -- _ �� ' - --��-�a ��'��_-- - — - — ,�� _ _ _ _ — - - — -- --- �� '�l ��'�a", -.�2 � �r,G��'"� - - G' CL:�_ Q .�-' ��v - --- - - � � <��.c��? ' -C_. - - --� - �-�Y�i�� e� - - - -- — -'L�:�� __yl� �-c��n�— �Ie„P�su-��- - - —- - � C'�/� D��'� 7 - - - - - - _ C'� �.��- . _ _ _ _ - .�9�- _C�.,�� *�� -- - - - - _ - - .� _T_h� �t��t��_��_,�__ ��_c.gt� s<�_ — - - - _ __ _ _ --- -----��--��-�e-- �� . _ � � -- � ��--- ��° ' - �oc� - - - - - - -- - -�1'�� -- - L��x�-- � --- - - - - -- --��G�-- -��m_--��-��v�,— - - - - - _�D�_. ��Z- - �a3 -- ��o_ - -� -- �=---- -- -- -- --,L�.e�e.sP�uD _ __��1__�A��L��—_t�_��ce.�_ .��u�� L�� U . -- ,��_��---�--�-- ��--- --- - --- �,, --��u�� LOS ANGELES TTMT" M 20, 1977 . _ � . . H ousin Boom g . : ---Will I� Turn � � t �nto a Bust . Frenzy of Speculation Risky but Collapse Not Inevitable, Experts Say BY JOHN A.JONES Times Staff Writer Could speculation in houses drive the booming real estate market into a bust? There are some signs of possible danger: Inexperienced traders enter- ing a market that used to belong to professionals. Cocktail hours buzzing with stories of big profits. Some bro- kers playing the market to make themselves rich.sometimes using du- bious tactics to get their hands on hot properties. Informal syndicates dab- bling in the housing market. The game has reached such a fren- zied level that builders have resorted to lotteries to select the buyers of A survey by Coldwell, Banker & :their houses. And mortgage lenders �o. of its residential real estate affili- have raised interest rates, saying ates indicated that about 6�/0 of home they want to discourage loan demand, sales through its Forest E. Olson Co. which is heavier than they can han- offices in the San Fernando Valley,. dle. But there is little evidence that Orange County and San Diego County such steps have cooled the spr^cula- probably were speculative, because tive fever. the homes were left unoccupied after The situation is erilous, but a bust they were purchased. Coldwell, p Banker Residential Brokerage Co. es- is not inevitable, builders, brokers timated that 9.4% of its recent sales and lenders sa,y.The more likely out- ip the higher-priced neighborhoods of come: a significant flattening out in Hancock Park, Beverly Hills, New- the price trend,which, in itself, could port Beach and La Jolla, were specu- burn some speculators badly. lative. � The speculation seething through A spokesman for Walker& Lee, an the real estate market now is not the Anaheim-based firm,said that 13% of same as the paper pyramid that col- bu,yers in a recent survey reported lapsed in the stock market in 1929, that they were not selling their old industry experts say. Behind the homes. Precumably, such buyers in- scramble for houses at any price is a tended to use one of their two homes genuine demand for homes as the as an investment. postwar baby boom comes of age,and Ed Akins, president of E. B. Akins a genuine shortage of houses, blamed Development Co.. Tustin, one of the partly on environmental restrictions builders active on the Irvine Ranch that have limited building. property,said there are three kind�o� ' However,there is one link with the speculators, onl,y one of which is a stock market, according to some ob- problem. servers:Investors who have lost faith —The investor who buys a house, in stocks are putting their money into houses instead. Although the hottest spot is Orange County,investors are helping to drive up the prices of houses all over the state, real estate brokers say. Tract ' fialesmen estimate that up to 40% of new-home buyers are looking for a fast price rise rather than a family home,bnt brokers say the proportion of speculators among buyers of older L_�.........n..nl,In..ror L,OS ANGELES TIMES 1VIay 20, 1977 � � � � Akins said he knows of at Ieast on�e Orange County real r�xlts it out 8nd holds it for thrte or fota years before sell- estate broker who hag sent out phorr,y"buyers"t�four or ing it for a profit, Such investors influence the housing five new home tracts in a single wee�end,telling them to 1�1ar�Cet,Akii�s says,but they have always been around. put deposits down on houses in all of them.Then the bro- --The home buyer who lives in a house three years or ker arranged for the resale of the homes,getting himself a ffio, fixes the place up and sells for a profit, proba- commission and his"buyer"a profit on the markup. blymoving on to do the same thing in another house. But while the builders are blaming the.real estate bro- =`The real villain,who buys a house without�any in- kers, some brokers are casting the blame right hack at tention of closing escrow before selling to take his profi� builders'tract salesmen: Iie does tremendous damage to everyone in the home pur- "A lot of builders are selling to their ernployes,"said Ira Ch�sit�g arena" Gribin, chairman of Gribin Von Dyl B,ealtors, Sherman �utttang a new house in escrow immediately takes it off Oaks. "In one tract in the Valley,out af 85 houses being the market, Akins.says. Then the buyer puts an out- built, 30 were sold to employes while 800 people were ragecn�s profit on the house and attempts to sell it before standing in line to buy." he Clases escrow. According ta Gribin,the salesmen can then mark up the prices an homes they themselves ha�e bo h�This works `�ie'takes the house away from someone who needs it.If especially well if a tract is being develope�in two or more he does succeed in his plan, he establishes a new price phases,with usually a 10% price increase with each suc- range for that particular house,and the tax assessor loves cessive phase. it but everyone in the neighborhood suffers. This fellow Salesmen who buy in the first phase can hold onto thefr generates a false market." , houses until the last phase is being sold,Gr�lbin said.Then 3�kins said his firm sold one house,an attached condom- they can sell their own properties at the sam+e price as the fnium unit on it, three months ago for $88,000 in the going rate for the latest ones. "If 100 houses are being' Woodbridge development at Irvine."Within two weeks of built,the public is probably damn lucky to get 75 of them," the sale it was being advertised in the paper,with a picture Gribin said. of it,for$229,000,"Akins said."It was still in the framing Salesmen at the Irvine Co.'s f.racfs are nat allowed to atage." operate that way, according to Ken Agid, v"vee president Other builders report similar markups of$20,�b0 or more and director of residential marketing at Irs�ine Pacific On houses before they are even completed.Often,the buy- Development Co. er sells and takes his profit b�fore the original escrow "If our employes purchase a house,they are required ta closes.If Lhe builder won't stand for that,a second escrow occupy it,"Agid said. is opened and both close simultaneously. Salesmen and women at some of the Irvine tracts have a discouraging job these days.Many of the "villages" being prices have risen$20,000 in the last six months. ' built there are sold out long before they are completed,, Higher prices might cut back the speculative interest it� , and all the salesmen can do is tell visitors that the present future building,some salesmen say.But not necessarily. installment of homes is sold out and take their names for "We just finished a tract in Orange in the .$150,000 to the next group. $180,000 price range,and believe it or not we had specula-" One sales office in the Woodbridge area of Irvine has 5,- tors there,"said Akins."There are guys around who have 500 names on waiting lists for the 100 homes to be built quit their jobs and are heading up little syndications.Four next.And there are sti11246 names of prospective buyers guys go to lunch, put up $1,000 each and buy a house left over from the lottery for the first homes in that series, someplace(putting down a minimum deposit on an unbuilt These are some of the few detached homes now being �ouse).As the business builds up,one guy will just quit his built at Irvine,and they sold for about$66,000 last June, job and run the syndicate,and make a living at i�" Now they cost about$84,000 new—and more than$90,000 One professional man told this story of how such a syn- on the resale marke� dicate got started: The Woodbridge area is peppered with F'or Sate, For. Rent and For Lease signs in the windows of completed "N�Y son is 25.He paid$38,000 for a candominium,pay-� , houses that stand amid model homes,sales offices and bare ing 20%down.Six months later he decided to buy another framing of new construction. . one and rent out his first unit.Sa now he's paying out$75 a If speculators found it difficult fa sell or rent their newly month more than the rent. • acquir�:d houses,this could be expected to put a crunp in "Then he finds another plaee and goes into partnership �� `�:.. {,. , � • with an attorney to buy it, and they're renting that one �� ou� The rent money isn't enough to cover all the pay- Housing shortage allows spread of inents,but he's already got gaod profits i�them:' speeulation, brokers agree. • This kind of deal dQes at least one thing for moderate in- come families looking#or homes:it makes rentals availa- ' ��,;:•„ ., ble,often for less than their real cost.If the investor who their plans or even cause.the speculative market to col- holds onto a home for eventual profit can cover most of his iapse.An Irvine Co.spokesman said it is taking a little lon- overhead from rent,he's often content to make up the dif- ger now to make such a resale or rental,because the gen- �erence because of the ta�c advantages and the profits ex- eral price Ievel is going higher. pected when the house is sold. "It nsed to be possible to rent something out in a couple Builders and brokers agree that f,he cause of the hame of days,"he said."Now it can take two or three months or buying boom and the condition that allows speculation to more. And as there are more homes available for rent, SPread is simply that not enough homes have been built,to there's more competition. meet the demand in California.The overbuilding that oc- „ curred in other parts of the country three years ago did no�. Usually the rent will be about$Z00 a month less than �a en in California,said Michael Sumichrast,chief eco- the buyer's payments;'he added,meaning that a specula- nompst of the National Assn.of Home Builders in Wash- tor needs more cash to carry his investmenL until rt pays ��on. ' off. "In California,builders behaved quite abnormally,"Su� At another Woodbridge neighborhood,where condomin- ium homes are priced at an avera�e of $100,000, resale LOS ANGFT,ES TIMT '� 20, 1977 � ��. . � "We used to sell our houses five to six months fn ad-• michrast said."They had been hurt so manq times ii1 pre- �vance of delivery," said Agid of Irvine Pacific Develap- v,ious c}�cles t ha t t hey d i dn't bui l d for inventory." ment Co. "Now we've cut that to three months, which ' Building was held back,too,by the efforts of environ- doesn't bother the typical buyer{becauseb0 days is plenty mental groups to curb runaway development,and by city of time to sell a buyer's old house in today's market) but it governments trying to control growth and curb the de- cuts the time the speculator has for liis windfall profits mand for urban services,Sumichrast noted, with prices going up 21Fi%a month.It's a nice investment; Now the building boom is under way in spite of all the you don't make that in the stock market" . forces working against it,he said.In fact the pace of con- Agid added that if builders were the profiteers some struction is "too high for comfort—way out of proportion people think they are, "we wouldn't be concerned with Lo what you would normally eacpect" ' speculation.Instead of lotteries we'd be having auctions,to Security Pacific Bank of Los Angeles reported that Cali- get the hi�hest bid." fornia building activity in March clir�tbed to a record$1.4 Michael I. Keston,president of Larwin Group,Inc.,said billion, including $758 million.worth of single-family his firm is limiting its houses one to a customer,and re- homes. Homebuilding was up 3I% from the previous quiring buyers to sign statement that they will live in their month, �he bank said, and permits for multiple-dwelling new homes.Larwin also claims the right to cancel the deai • units gained 27%in the month. if a buyer tries to sell a house before escrow has closed, .The gain in apartment building should be encouraging. but Keston said it has not yet exercised that right. �Akins, the Tustin builder, said that if more apartments Akins said his firm takes the line that "a buyer can't were built there would not be such a shortage of rental show a house (for resale) while it's in escrow, because it still belongs to us and he would be trespassing on our homes, and there would be less opportunity for investors „ to rent out homes they are holding for profit. property. "There's no way to correct the shortage until govern- Peter M.Ochs,presio:ent of William Lyon Co.,Newport ment allows houses and apartments to be built," Akins Beach,said his firm this year requ�res buyers to sign state- said."Given a good market,I don't think we could ever sa- ments that they will live in their new homes at least nine �iisfy the deman.d for housing." months after purchase,or Lyon will have�the right to buy Meanwhile, builders are trying various plans to hold the house back—at the original price.This condition may � speculators at bay while selling new homes to buyers who be waived in case of a job transfer or ger9uine hardship, will live in them. Ochs said, The lottery ap�roach used by the Irvine Co.is one way. "�e think this has been successful," Ochs said. "We Instead of having hundreds of would-be buyers camping have seen people who read that statement then.sort of out�vernight before the sales office opened,the developer gradually drifted towards the door and out,and we never iook names and issued cards for a drawing to determine saw them again:' �rho would have a chance to buy.But speculators e.ntered � Savings and loan associations have started raising home the drawangs directly or bought lottery cards frorn other 'loan interest rates and lending charges to borrowers who buqers. are not buying homes to live in. They were prodded to •rnake money tighter for s�ec��Iators when the Federal Home Loan Bank of San�'rancisco,which regulates S&Ls in California,Arizona and Nevada,raised its interest rates for money it lends S&Ls to help finance their operations. Last month the lowest rate for a home loan in Southern California went up to 9�/4% from 9% at most S&Ls,and many of them were adding a quarter or half a point more for non-owner-occupied homes. - Some critics say this kind of action makes the situation worse. _ "The fastest sales growth historically has occurred at timea of rising interest rates, because people think they will head even higher,"said Agid. "Higher interest rates aren't going to hurt the specula- 'tor. He doesn't care i£it's 11%,because he doesn't intend to make any payments anyway.The only person it's going to penalize is the person who's going to buya house." But Maurice Mann,president of the San x'rancisco regu- latory bank, said there are two sides to the speculation problem: shortage of houses,and"a lot of money around, looking for a place to go:' Tightening up on loan money is one way to cooI�down the market,Mann said. • Mann said he is glad to see S&Ls are fighting speculation by raising down payment requirements,requiring affida- vits that borrowers intend to live in the houses they fi- nance,and offering new loans only to current borrowers, as well as raising interest rates. "One thing that concerns me right now is increased at-. tention being paid to second mortgages,"Mann said.Some homeowners whose property values are soaring have taken their profits out through so-called equity loans,se- cured by second trust deeds,and used the funds to make down payments on other houses for speculation,he said. He said he is encouraged by the growing public recogni- tion of how speculation is inflating home prices. � � LOS ANGELES TIM� � 20, 1977 ., �i `f3,ea1 estate is very swmd today in Calif�nia,and'm no i�qminent danger"of a market collar�r, Mann said."If the r�ealtors, the builders and the lez�uers are aware of (the problem) and working in concert, we can head this thing tiff." ; Could the speculative boom collapse and hurt some of 1�e less knowledgable latecomers in the game? +'� "People who buy homes and think they're going to sell �em in two months might be taking a big risk," said Je- �bme Blank,president of the California Assn.of Realtors. ;' Gribin, the San Fernando Valley re,altor, asked, "If the �arket ever turns down,can you imagine what's going to �lappen if these.houses all hit the rental market at the �ame time?" �� Said Akins, the Irvine builder, "If the market were to �urn sour,these guys would walk out and dump the houses �nd flood the market. Speculators work on thin ice,and it i�oesn't take much to frighten them." , David L. Smith, vice president and chief economist ai. Glendale Federal Savings,said the danger is mainly for the "" "'��v""'"� �� amateur speculator, "the guy who's buying one or two any more, but there's still same way to go before that �iouses, planning to rent them out to cover 90% of the point," said George A. Fulton, senior vice president of inortgage payment." Walker&Lee,the Anaheim real esta�e firm. � Lenders still closely study a borrower's financial stand- "Our figures show that 55% to 60% of the couples buy- �;�ng, but the old standard of allowing only ?0% to 25% of ing homes in 1976 had two incomes,compared with 30% to ;�Income for housing costs has gone by the board,they ad- 35%in the early 70s. tiinif,. Now they allow a borrower to budget up to 30% of "Personal income is increasing,too,helping somewhal to tnonthly gross income for house payments, including in- keep pace with increased housing costs. And when the �surance and taxes. pressure is on, a much higher percentage of a family's �i "It's very difficult to qualify people today on those kinds budget will be spent for housing. '�nf numbers,"one lending officer said."We hope their sala- "I don't think we've seen how much people are willing `.?: �es will continue to go up. But delinquency rates have to pay ior�heir home. . .especially here in Southern Cal- i','��en pretty stable." ifornia." �I "DematteF ca�n continue to skyrockef. prices until we , The latesl measurement taken by the Califoi•nia Assn.of #'��each the breaking point where people can't afford to buy � Realtors showed the median price of an existing home in .�California last March reached $56,671, up front $95,500 a ' y,ear earlier. � ' Recentl,y lhe average price of new homes sold in Orange �, Count,y was reporled to be$107,000,but some sources said ,., t4�at was a biC high—it should have been only$90,000. '1 hings are probably going 6o get better,though,accord- } '1ng to Shirley Stephenson, an assistant vice president of �' Security Pacific Bank who keeps close watch on housing �'�statistics. '� Although new home prices have jumped almost 41% ��'from 1974 to 1976 and existing houses have gained 39% in ; 'price during that period, both personal income and the ; pace of building are increasing, too, the bank noted in a ��, $tudy it is preparing. � I � Over the past two years, house prices in Southern Cali- �� ornia have run far ahead of both per capita personal in- , � come, which has increased 18.9% from 1974 to 1976, and i � the general consumer price index, which has risen 17.9% 'i in that period. • But a longer view, from 1965 to 1976, shows that new home prices have risen 113.?%, existing homes have gone , � up 93% and the consumer price index has risen 75.5%. In , the same decade, however, personal income has risen � 113.3%,Mrs.Stephenson said. '.i In other words,she said, lhe spurt in home prices in the ' last two years has been a "temporary aberration"which is ;�: likely to be smoothed out as incomes continue to rise and '; home prices increase at a more moderate rate. �� "With the record levels of home building ovet� the past ,' few months," Mrs. Stephenson said,"we feel the shortage �; of housing will soon be alleviated, removing the upward '� pressure on house prices."