Business & Economy

What gas leak? Buyers in Porter Ranch snap up luxury homes

The strength of the market seems to have even surprised Toll Brothers executives, who plan to build another 1400 homes in their development overlooking the San Fernando Valley over the coming years.
The strength of the market seems to have even surprised Toll Brothers executives, who plan to build another 1400 homes in their development overlooking the San Fernando Valley over the coming years.
Ben Bergman/KPCC

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It’s no secret the Southern California real estate market is hot right now, but some may be surprised by the popularity of one particular neighborhood: Porter Ranch. Barely 18 months after a broken well caused the U.S.' worst-ever natural gas leak, homebuyers seem to be shrugging off the risks, especially people in the market for high-end properties.

"I told my wife we were going to buy this house even if we had to wear a gas mask," said Gabriel Barajas as the couple toured a 5,272 square-foot model home similar to the one they'll move into this summer. Barajas, who grew up in the San Fernando Valley, said "I always wanted to have a house up in the hills and I finally bought it."

The Barajas' home is one of more than 1400 Toll Brothers Inc. plans to build over the coming years as part of a planned community that sits about a mile from where the gas leak occured, according to the company. When the project is complete, the development will feature 3,400 homes and condos. 

"I know that they wouldn’t be building these homes if we were in danger," said Erica Barajas.

Toll Brothers completed its takeover of the Porter Ranch development in 2014, more than a year before the gas leak. 

"It was an inopportune time," said Toll Brothers Division Vice-President Frank Su. "Toll Brothers has a significant investment here in Porter Ranch."

The four-month leak was finally capped in Feb. 2016, and some Porter Ranch residents still complain about health effects from the Aliso Canyon gas storage field. But the episode seems to be of little concern to many people looking to buy Toll Brothers homes.

Toll Brothers says it has sold four houses this year for more than $2 million dollars in Porter Ranch and has four more that will close soon, all record-high prices for the area. The firm's most basic houses go for just under $1 million. Most feature grand staircases, closets bigger than studio apartments and kitchens more suited to a restaurant than serving a family.

The strength of the market seems to have even surprised Toll Brothers executives, who boasted in a conference call with investors last year that the company didn’t have to offer discounts after the leak. 

"We have made no downward adjustments in our pricing," said Toll Brothers CEO Douglas C. Yearley, Jr. "It should absolutely be business as usual with typical Southern California pricing power and great action."

The forgotten leak

Longtime Porter Ranch real estate agent Ken Sampson says these days he rarely gets questions about the well.

"A year ago it was on everyone’s mind," he said. "Maybe one out of 15 asks about it today. It was a shock to all of us that the facility was even there, but I believe as a whole the public in general doesn’t really pay attention to it."

There are still lots of current Porter Ranch residents who are paying very close attention to the situation, and some of them went to move away from the area.

Laurie Carrigan is one of those who relocated; last month she moved her three dogs and six kids to a house farther away from the gas field. Carrigan says her family was still getting sick despite the ruptured well having been capped so long ago.

"People that actually have experienced the grief and the doctor’s appointments and the constant rashes and nosebleeds are not willing to buy a house in Porter Ranch," said Carrigan. "They’re willing to get as far away as possible."

She’s not selling her old house yet because her home value has been slower to recover, something analysts say is common with houses closer to Aliso Canyon. That in turn leads to higher average sales prices.

"We do see fewer sales the closer you get to the actual gas leak, but because those sales aren’t happening they’re not affecting the prices," said Daren Blomquist, vice-president of RealtyTrac.

Overall, home sales are up 18 percent in Porter Ranch over the past year, according to RealtyTrac.

"People are buying houses again," said Carrigan, who is a realtor. But because she doesn’t want others to go through what she has, she recently found herself in the strange position of steering a client away from buying in the Toll Brothers development.

"I told them, 'Don't buy until you know for sure. You have two small kids. Don't do it.'"

She said it’s tough to convince clients to stay away because they're hearing from Toll Brothers that everything is fixed.

"If it’s fixed you assume it’s ok," said Carrigan, who said besides unanswered questions about what caused the blowout, "there are still elevated spikes" of natural gas emanating from Aliso Canyon.

"The most regulated facility in the entire country"

Toll Brothers’ Frank Su acknowledges he still has concerns about the storage field.  

"The gas leak was not great and we still have concerns about the future and safeness of the facility," he said. 

Toll Brothers agents emphasize to perspective buyers the level of regulatory oversight at Aliso Canyon, said Su.

"We tell them the leak has been capped, the facility has been there for 50-plus years and it's probably the most regulated facility in the entire country," he said. "We feel like it’s going to be very safe in the future," said Su, adding that for most potential buyers, "that’s enough for them."

Su said he wouldn’t be recommending Porter Ranch if he didn’t happily live there with his family for the past three years.

"We were here during the leak and my kids weren’t affected," said Su. "Porter Ranch is still a great place. It’s not a horrible place."

It’s also the rare place in Los Angeles where there are top schools, low crime rates, and the ability to customize a home with a view from the ground up – pluses that outweigh risks for many with the means to purchase a home here.

This week, a State Senate committee approved an emergency bill that would keep Aliso Canyon closed until regulators complete a study into what caused the leak. Southern California Gas Company opposes the measure. It maintains the storage field can operate safely while the study is underway.