Empire building

Off the beaten path, past acres of orange groves and tucked among rolling green hills and blooming wildflowers, sits a brand-new neighborhood of doctors, lawyers and other professionals who commute to nearby jobs.

If this enclave of large custom homes on one-acre lots were in Irvine or Calabasas, the houses would fetch $1 million to $2 million. But this neighborhood, named Sunset Hills by upscale builder Joseph Nicholas Homes, is in Redlands in San Bernardino County, and the high-end homes, which start at $550,000, are selling as quickly as they’re going up.

Known as a magnet for skilled laborers seeking affordable homes, San Bernardino and Riverside counties -- dubbed the “Inland Empire” in the 1950s for a Riverside bank’s advertising campaign -- slowly are transforming into a haven for young professionals seeking housing.

Last year, about 33% of new homes sold in San Bernardino and Riverside counties were priced at $300,000 and higher, compared with 5% in that category just five years ago, according to DataQuick Information Systems, a real estate research firm.

The Inland Empire leads the state in new-home building, with 33,426 permits for single-family detached and multifamily units pulled last year, according to the Los Angeles Economic Development Corp., which tracks Southern California’s economy.

Builders like Randall Lewis and Jim Previti, catering to the burgeoning population of upscale buyers, already have created 40 developments with homes starting at 3,000 square feet and price tags in the $300,000-to-$750,000 range, according to John Husing, an Inland Empire economist and consultant.

As a result of this transformation, lower-income, first-time buyers who work in service, manufacturing and distribution jobs increasingly are forced to search the outskirts of the counties for affordable homes -- in Hesperia and Victorville, Banning and Beaumont, housing experts say. Prices there range from $160,000 to about $250,000.

“There is a fundamental shift in this market today,” Husing said. “We’re seeing a mass migration of highly skilled people to this region. Go to any area now and it’s exploding, bringing professionals.”

Reese Aplin, 35, a real estate investor, and his wife, Nancy, 37, an accounts representative for a mortgage lending company, said goodbye to commuting 50 minutes each way from their Newport Beach condo when they moved into their $575,000 Sunset Hills home in Redlands last summer.

Wanting to be closer to their jobs in Riverside and Rancho Cucamonga, respectively, the couple say they are happy with their four-bedroom home, which features an office, den and pool.

The number of managers and professionals living in the higher-priced areas of Rancho Cucamonga, Temecula and Corona grew by about 40% over the last decade, according to local economists. And white-collar jobs, steadily on the rise in the last five years, are expected to grow by more than 20% by 2010, according to the Southern California Assn. of Governments.

These professionals -- office managers, engineers and highly skilled technical workers -- are eschewing the commutes to far-flung jobs in favor of working where their homes are, in the upscale neighborhoods in Murrieta, Fontana and Redlands.

Regional developers and builders such as Forest City Development California, the Lewis Group of Companies and the much smaller Joseph Nicholas Homes spotted this trend a few years ago and say they can barely keep up with the demand for higher-end housing, apartments and retail outlets.

Targeting young professionals, singles and move-up buyers who want to live and work in the inland counties, Lewis Apartment Communities is near completion on the first phase of Homecoming at Eastvale, a master-planned community of 738 townhome and apartment rentals in Mira Loma.

The apartment community, which rises like an oasis in the dairy lands of unincorporated Riverside County, includes amenities such as a 24-hour computer room, a fully equipped gym and a common outdoor area rivaling that of a high-end hotel.

The attached apartments rent for about $1,200 to $2,000 a month.

An 820,000-square-foot retail center with restaurants and shops is being developed nearby by Lewis Retail Centers, a necessity in an area where upscale retail is nonexistent and dairy cattle still outnumber people.

Master-planned communities that combine retail and a variety of housing types also are gaining a foothold in San Bernardino County. From Rancho Cucamonga to Chino, where 5,000 acres of dairy land will soon be converted into the Preserve, planned communities with town centers, parks, libraries and cultural venues are on the drawing board.

Rancho Cucamonga, a city with an average annual household income of more than $75,000, has blossomed over the last three decades from three small agricultural towns into one robust city of homes priced from $300,000.

To attract residents to the upscale area and to keep them there, the city has approved the development of Victoria Gardens, a massive project two miles south of the 210 Freeway just off the 15. Developed by Forest City Development California and Lewis Retail Centers, the master-planned, 2.45-million-square-foot complex will feature retail, residential and cultural space for residents of Rancho Cucamonga, Fontana and Upland.

Construction of the gigantic project will begin in June, with completion of the first phase expected in fall 2004. The project will bring 3,000 jobs to Rancho Cucamonga, according to the city.

Despite local job growth among higher-paid professionals, the Inland Empire, whose population more than doubled from 1980 to 2002 to 3.4 million and is expected to grow another 50% by 2010, still is a mecca for young commuters seeking affordable homes with a backyard.

Brad and Janice Terschluse are typical of those moving to the cities that border Los Angeles, Orange and San Diego counties, such as Temecula and Murrieta to the south and Fontana to the north.

Janice, 26, an insurance industry worker, and Brad, 28, a pharmaceutical representative, both work in Orange County but recently bought a home in Corona, one of the fastest-growing cities in Riverside County.

The couple, who owned a condominium in Long Beach, searched for more than a year for an affordable home close to their jobs. Priced out of the area, they decided to put down roots in Corona, where they found their “perfect” three-bedroom home: a 2,400-square-foot house with a loft, a large yard with a Jacuzzi, and a large grocery store down the street, all for $350,000.

Like many of the throngs of commuters that clog the 91 Freeway every day, the couple, each of whom commutes 2 1/2 hours to and from work, said they would “take any job that became available out here.”

In fact, a 2002 study by the Western Riverside Council of Governments found that 47% of the Riverside Freeway commuters surveyed said they would take a 5% pay cut to work in their Inland Empire communities and avoid the traffic jams on the 91 that diminish their quality of life. About 38% said they would agree to a 15% pay cut to work close to home.

Employment opportunities may be on the way, according to Corona Economic Development Manager Nancy Martin. About 400,000 square feet of new office space went up in the last two years, which the city hopes will reduce the number of Corona residents who commute to jobs outside the county -- now about 30%. There are plans for developing another 2 million square feet of industrial space over the next five to seven years.

Since the 1970s, affordable homes have attracted waves of transplants, first to the western end of Inland Empire -- Chino Hills, La Verne and Upland -- and then to the counties’ border regions.

In the 1980s, industrial developers came to the empire, erecting scores of 100,000-square-foot big-box manufacturing warehouses; the ones built in recent years are 1.3 million square feet. With them came thousands of skilled laborers, and inexpensive homes to shelter them.

While Los Angeles lost 105,633 jobs from 1990 to 2002, Inland Empire’s job market grew by 343,475, or 40%, the greatest increase among the five major Southern California counties, according to the California Employment Development Department.

As home prices soared in the coastal areas in the 1990s and Inland Empire’s “logistics” industry of warehousing and distribution grew, attorneys, account- ants and high-tech workers ages 25 to 44 migrated from Orange, San Diego and Los Angeles counties, seeking luxurious homes at prices they could afford.

“The Inland Empire today is looking like Orange County 30 years ago,” economist Husing said.

San Bernardino and Riverside counties account for more than 50% of Southern California’s sales of newly built homes; 10 years ago it accounted for 33%. The median price of a home in San Bernardino and Riverside counties in March was $213,000, compared with $334,000 for the rest of Southern California, according to DataQuick. But the gap is closing with the move toward higher-end homes.

As that shift takes hold, more skilled workers, such as Margo and Ramiro Pineda, who are first-time buyers, are moving to the farthest reaches of the inland counties, attracted to homes priced from the high $100,000s to the mid-$200,000s.

Margo, 44, a Gardena bookkeeper, and her husband, Ramiro, 51, a Hollywood Park Casino worker, recently purchased a three-bedroom house in Beaumont for $160,000. The property is in Pardee Homes’ master-planned community, Sundance, which has buyers flocking to the arid, rustic town.

Beaumont’s population of 11,384 grew by only 17.5% over the last decade but will more than double after the 4,600 homes go up there.

The Pinedas will have to commute 84 miles each way to their jobs, a prospect they both dread, until they find work closer.

KB Home, whose focus has always been on first-time buyers, is starting to concentrate on Victorville and south Riverside County, where dairy land is rapidly making way for new housing and where first-time buyers still can buy a new home for about $200,000, said Jeff Mezger, chief operating officer of the company. KB Home now has shifted 50% of its focus to move-up buyers, Mezger said, building $300,000 homes in Ontario, Fontana and Rancho Cucamonga.

Although there is still plenty of land available for home building in the Inland Empire -- Randall Lewis estimates that west Riverside County alone has land for at least 10,000 more homes -- developers are expected to focus on denser, urban-style building with more apartments and community centers, analysts say.

First-time buyers Paulette and Rickerby Hinds decided against living in a new neighborhood and chose instead a home near their family’s publishing company in Riverside. Their 1937 tri-level Spanish Mission-style home, which they bought for $199,000, is two minutes from their office and is in a multiethnic, multigenerational neighborhood, which they like.

Real estate agents in the area hope builders will develop mixed-use projects that appeal to a broad range of buyers.

“We need more white-collar workers here in Riverside who get higher wages and can afford to buy more expensive homes,” said Mike Teer, owner of Teer One Properties in Riverside. “We need to integrate industrial, commercial and residential space, with condos downtown on top of businesses. That’s the wave of the future.”

It may already be happening. In the city of Riverside, 400,000 square feet of office space is planned for downtown, and already it is attracting professionals who are working and living there, said Michael Beck, Riverside’s deputy city manager.

Two Orange County-based insurance companies recently opened branches of their businesses in Riverside to accommodate workers who live there, Beck said, and many of those employees are now looking to buy $500,000 homes.

David Pomierski, a 44-year-old sales engineer for Verizon, embodies the new attitude of those living and working in the Inland Empire. After enduring a five-hour round-trip daily commute to the company’s Norwalk office for 2 1/2 years, he grabbed a recent opportunity to work in the company’s Ontario office.

Although he liked his former position, the commute that began at 3:30 a.m. took its toll. He said he now gets extra sleep in the morning, hops on the new 210 Freeway near his Upland home and is at his desk 20 minutes later.

“I feel absolute relief to not commute, and the change has given me more productivity on projects,” Pomierski said. “I never considered moving away from here to get closer to the job. I love it here.”