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Newhall Ranch: How much can a giant new community ease LA's housing crisis?

Newhall Ranch, the biggest housing project in development in Los Angeles County, is moving forward after recently winning key approvals and stands poised to become the future home for 60,000 people.

The developer, Five Point Holdings, wants to break ground in the Santa Clarita Valley by next year, and build 21,500 units — a mix of houses, condos and apartments — over 15 to 20 years. Ten percent of the housing will be priced below-market for low-income families.

Still, the project's ability to improve the area's housing crisis will be limited, according to real estate experts and the developer itself.

The local housing deficit is too severe, "numbering in the half a million or above number of units," said Stuart Gabriel, director of the UCLA Ziman School for Real Estate.

"Newhall Ranch will certainly be helpful, but not curative in any sense," Gabriel said. 

An artist's rendering of the planned Newhall Ranch housing development.
Five Point Holdings
An artist's rendering of the planned Newhall Ranch housing development.

Gabriel said building must be sustained and occur at higher densities, be it in the suburbs or in cities. Still, the development's advancement triggered relief among real estate agents in the Santa Clarita Valley.

"We need this," said Nancy Starcyk, president of the Southland Regional Association of Realtors. "People cannot get into a home."

So few homes are on the market now that Starcyk said they’d all be sold in one-and-a-half months.

Newhall Ranch took a couple of decades to get last week's necessary approvals from county supervisors, surviving legal challenges from environmental groups that brought the development before the state Supreme Court. 

Environmentalists were concerned about the greenhouse gases the development would generate and its impact on local wildlife.

John Buse, an attorney for the Center for Biological Diversity, said his group may still appeal the county approvals. 

He said the group is attentive to the housing shortage but said development was better suited for existing urban areas.

"The solution to the high price of housing is not to develop open areas that are exurban sites, far away from urban areas," Buse said.

A spokesman for the developer said that the site for Newhall Ranch is just miles away from L.A.'s city limits, and should attract buyers from there, drawn to the quality of life of a large, planned community, as well as businesses.

"I just know that in L.A. County today this is the last opportunity to really build this number of homes and create this number of jobs in one area," said Steve Churm, Five Point spokesman.

Newhall Ranch will start out as two villages with 5,500 homes and 2.5 million square feet of commercial space between them.

To offset the pollution that will be generated by construction and residential traffic, Five Point is working to reduce the development's carbon footprint to zero. Strategies include using solar panels on every home and setting up electric car charging stations, Churm said. 

The developer also is pursuing off-site mitigation projects, Churm said, such as placing 2,000 electric car chargers throughout the county, buying forest land in northern California and delivering clean-burning stoves to sub-Saharan Africa.