LAUSD Breakup Could Spur Market, Realtors Say

ENCINO — With a three-car garage, a swimming pool and a floor plan built for throwing parties, the three-bedroom stucco home that Pat “Ziggy” Zicarelli was showing Friday afternoon drew plenty of oohs and aahs from the real estate brokers who toured it.

Take that same ranch-style house and put it in Calabasas, with its well-regarded schools, and it would sell easily--probably for about $50,000 more, the brokers agreed.

But what if the property and all of Encino were suddenly part of a new separate city instead of within Los Angeles city lines? At this notion, the professional home sellers shrugged. Sure, a location in Valleyville, or whatever the new municipality might be called, could enhance property values, but they wouldn’t stake their careers on it.

“I think when people come over that hill, they have already decided they are in a separate area,” said agent Matt Coletta. “Tarzana, Sherman Oaks, Encino--they are all individual towns right now. The fact that we are under the L.A. umbrella doesn’t, I think, occur to most buyers.”

Although the twin movements to divorce the San Fernando Valley from Los Angeles and its school district share similar philosophies, the world of real estate seems to be of two minds regarding the economic effect of secession.

Mention the prospect of breaking up the mammoth Los Angeles Unified School District to a roomful of Valley real estate agents, and people perk up. But breaking away from the city is an idea that has not generated much enthusiasm among the multiple-listing crowd.

Valley cityhood “is so new and such a major undertaking, that I think a lot of people are not even looking at it or taking it seriously,” said John Maquar, who owns a Prudential real estate office in Northridge. “There are so many factors that enter into it that without more information, any discussion of property values would be hypothetical.”

Whether an independent Valley drives up real estate prices may depend on the practical, as well as the ephemeral, real estate agents say. The property tax rate, level of police protection and the frequency with which streets are repaved would dictate whether the new city would be more attractive to buyers.

In addition, said Beverly Rutkin, an Encino-based agent with the Jon Douglas Co., “I think a lot would depend on what they name the city. If they named it San Fernando Valley City, I don’t know if it would encourage more people to move here.”

On the other hand, many real estate agents accept as a matter of faith that an independent Valley school district would stimulate the real estate market. The quality of neighborhood schools, after all, is one of the first things families consider when they are looking for a new home. And Los Angeles city schools, deservedly or not, suffer from an image problem, they noted.

“If we can bring the good schools back to the Valley that were once here, that in and of itself will bring property values higher,” Zicarelli said.

Others believe that independence would lead to improved schools.

“If the Valley becomes its own city, the school district is bound to get better here,” said Tom Carnahan of Carnahan & Associates Realty in Woodland Hills. “Then, home buyers will budget differently, spending less money on private schools and more on their home purchase.”

The San Fernando Valley Assn. of Realtors was a big supporter of the new law that makes it easier for voters to dismantle the Los Angeles school district. Its sponsor, Assemblywoman Paula Boland (R-Granada Hills), was in the real estate business before she went into politics. While Boland was pushing her bill last summer, the professional group helped lobby for its passage.

But the association has taken a wait-and-see approach to Boland’s newest effort, legislation that would facilitate the Valley’s secession from Los Angeles. Although the bill recently won approval in the Assembly and faces a tough road in the Senate, the real estate group has not yet taken a position, said Jim Link, executive vice president.

“Our position is we are watching the progress of the bill like everyone else,” Link said. He said a formal vote on secession will require a great deal more study. It is widely assumed that as an independent city, the Valley would have more tax revenue to spend on such municipal services as parks, landscaping and police officers.

“What we would have to look at would be if the Valley is getting its fair share, would the community be better off in terms of services provided to the population,” Link said.

David Dale-Johnson, an associate professor of finance and business economics at USC, said secession could make the Valley a better place to live by giving homeowners closer ties to their government officials. Residents who believe they have a greater say over how their city dollars are spent might be willing to pay more for services, he said.

“The smaller the community is, the easier it is to hook into the bureaucracy and to make sure your wishes are being responded to, if not met,” Dale-Johnson said.

To Zicarelli and the real estate agents who gathered at his open house Friday, however, the question of who runs the Valley and collects its taxes still seems remote from the immediate business of selling houses.

In their view, whether the Valley secedes or not, people will continue moving here for the same reasons they always have--because they work in the Valley and because homes there tend to be less expensive.

“We still have the drawback of being in an area that is hot,” said ReMax agent May Ling.

Richard Tucker, a first-time buyer who looked over Zicarelli’s Encino listing, said that as a homeowner, he would be interested in knowing if secession would increase property taxes. But in deciding where to buy a house, the 33-year-old clothing retailer said the issue that mattered most was proximity to the San Diego Freeway, which he uses to travel to work downtown.

“Personally, I’d rather be on the Westside, but I’m only able to afford something in the Valley,” he said.

Staff writer Margaret Ramirez contributed to this story.