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Keynote Address to South Bay Association of Realtors
We all saw the news last week that median home prices have
experienced the sharpest decline in 35 years.
Yes – the regional housing market is slowing, but it’s not going to
crash.
Mortgage rates are still low.
Home process are not increasing like they were over the last two
years, but the market is not going to fall out from under us.
It may appear that the decline is much more sever in Los Angeles
County – but you have to consider that our housing process are MUCH
higher already than the rest of the nation.
Any small shift locally is going to look huge compared to the rest
of the nation.
Always have to consider that our population continues to grow but
the available land for housing isn’t.
Although the housing market peaked in Fall 2005, Southern
California’s homebuilding market is still considered relatively
strong.
Favorable underlying economic fundamentals continue to support
Southern California’s housing market, given the region’s continued
low unemployment rate, and strong employment growth.
Much of the growth has been a high-paying jobs in the
service-providing industries.
The concern is over homebuyers who have taken one of the adjustable
rate or hybrid-type loans, who could barely afford the mortgage in
the first place.
Registrar-Recorder/County Clerk says that the notices of default
recorded during the first quarter of 2006 has increased to more than
11,385 notice, up 26% over the comparable 2005 period.
The resale housing market in Southern California has gone from “red
hot” to a buyer’s market.
As long as mortgage interest rates remain relatively low, employment
and population both continue to grow (important underlying
fundamental), the region’s housing market will remain reasonably
healthy.
Therefore, the result is a “soft” land, not a crash.
Positive trends will remain in key industries, including business &
professional services, commercial aerospace, international trade,
technology and tourism.
Major construction projects will continue to provide support for the
County’s economy into 2007.
Work is underway on the Gold Line extensions to East Los Angeles,
and construction should start on the Exposition Boulevard light rail
line during the third quarter of 2006.
More projects will get underway at “LA Live” in Downtown Los
Angeles.
Work is also expected to get started on the Grand Avenue project in
early 2007.
At last count, the permit value of all the major projects in the
County totaled about $30 billion.
Electronic Recording
Registrar-Recorder is still working to bring online the Electronic
Recording Delivery system.
Approval is in the hands of State Department of Justice at this
point for their signoff.
Public hearing was last Tuesday.
Next is approval of security protocols to ensure system is safe and
confidential.
Goal is to have system fully working by January 2008.
Once online, system removes paper trail and excessive time delays in
getting records filed with the County.
Allows electronic delivery of titles and other info having to do
with real estates transactions.
Should provide a big cost savings in LA County, which had 3.3
million of the 19.9 million recordings filed in the state last year.
South Bay Successes
Retention of the Los Angeles Air Force Base — saved over 50,000 jobs
and $8 billion in economic output in L.A. County, 112,000 and $16
billion statewide.
LAX Settlement—the airport’s growth has been restrained to allow
modernization and safety improvements but limit the number of
passengers coming through LAX—So Cal must share the burden equally.
SCRAA -- As part of the LAX Settlement Agreement, Los Angeles Mayor
Villaraigosa has agreed to seek a regional solution to the ever
expanding air traffic in Southern California, and has agreed to
participate in the reactivation of SCRAA – the Southern California
Regional Airport Authority.
First meeting of SCRAA was last week.
Key to reactivation was City of LA agreeing to participate and
appointment of Councilman Rosendahl.
We face regional challenges at our airports and we need regional
solutions to solve those challenges.
“Career Pathways” program—I helped kick-off this pilot program at
South Bay refineries earlier this year. It provides training and
high income job opportunities to foster youth, dislocated workers,
and disadvantaged adults—guaranteed a job upon graduation at area
oil refineries.
Safe Surrender Program—allows for mothers to leave their babies at a
fire station within 72 hours of birth with no questions asked—46
babies saved to date that might otherwise have been abandoned to
die.
Homeless Funding Plan
Last month, the Board of Supervisors approved a plan that allocates
an unprecedented ONE TIME $80 million to homeless shelters and
social service programs throughout Los Angeles County.
The money is part of the $100 million ``Homeless Prevention
Initiative'' approved by the board in April as a way to help the
county's nearly 90,000 transient residents.
The ``Homeless Prevention Initiative'' also includes a commitment of
$20 million in ongoing funding.
The next step is for county officials to return to the board in 120
days with contracts that allow cities and community groups to apply
for funding.
Challenges
Homeland Security – 5 years later
We recently marked the 5th anniversary the 9/11 terrorist attacks.
Although a time of remembrance it is also a time to examine where we
have been and where we are going in our efforts to secure Los
Angeles County.
We have always been and will always be well prepared simply by
nature of the number of natural disasters we have faced in this
region.
The Terrorism Early Warning group established in October 1996 to
develop intelligence and early warning for terrorism and emerging
threats.
LA County was way ahead of rest of the nation – opening TEW years
before anything similar anywhere else in the nation.
TEW brings together law enforcement, fire, health and emergency
management in order to prevent, counter and respond to terrorism and
emerging threats.
Integrates local-federal levels of response and incorporates links
with private sector to protect critical infrastructure and cultural
assets.
Currently ~26 TEWs at various stages of development in US.
Joint Regional Intelligence Center Opening - July 27, 2006
Fuses FBI, LAPD, LASD, TEW and Department of Homeland Security.
Tsunami Panel
I recently hosted a Tsunami preparedness panel, along with the
Redondo Beach Chamber, focused on our Beach Communities.
Panel of experts spoke on how tsunamis, occur, what our potential
threat level is and how the County is working with cities to
prepare.
As much as we have a high-tech early warning system – we also must
have low-tech solutions - our communities must understand and know
how to act. Public awareness and preparedness are just as important.
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