The gas leak near Porter Ranch, a community in the San Fernando Valley in Los Angeles, was finally permanently capped on Thursday, according to the Los Angeles Times.
But the fallout from the gas leak, which the Times quoted experts as estimating had spewed more greenhouse gases than 440,000 cars emit in a year, is far from over. Last Sunday, the paper reported that residents were demanding cameras and a random sample of the air quality to monitor the gas leakage. On Thursday, it reported that residents claimed to still be getting sick because of the leak.
For home builders and land developers with large stakes in the area, the permanent seal will possibly begin to offer closure after a tumultuous few months that trace back to late October, when the gas leak was first detected. Toll Brothers isn’t the only company with a stake in the area. For instance, Newport Beach, Calif.–based Foremost Communities and Greenwich, Conn.–based private investment firm Starwood Capital Group Global bought a 230-acre parcel in Los Angeles County next to Porter Ranch in 2014. Foremeost didn’t respond to a request for comment.
Toll, with land acquired through its $1.6 billion acquisition of Shapell Industries’ assets in November 2013, has four developments for sale in Porter Ranch. According to Hanley Wood Real Estate Economics, Toll’s Seville at Aldea project began selling before the Shapell sale in July 2013 and has 130 units zoned for development.
Also in Porter Ranch, Toll’s Bluffs Collection and The Glen developments began selling in October 2014.The Bluffs Collection has 69 units zoned, while The Glen has 90 units zoned. Toll’s fourth development in the community, Westcliffe, with 107 units zoned, began selling in November—just after the gas leak was detected.
In a response provided for BUILDER, Frank Su, a Toll Brothers division vice president and Porter Ranch resident, said the builder remains fully committed to the project.
“Our first concern is caring for our Porter Ranch customers, employees, and neighbors,” Su said in the response. “As a significant property owner in the impacted area, and with many of our employees both working and living here, we personally share the concerns of the community. We are in frequent contact with government offices and community groups to ensure that we stay on top of the situation and can best be of assistance.
“We are working with our customers to ensure their satisfaction as they continue to visit our sales centers and buy our homes. Porter Ranch is a wonderful community that we are proud to be a part of,” Su continued. “We look forward to the resolution of this matter, the return of the residents, and the full recovery of the area. We are committed to continuing operations and building our spectacular parks, trails, and new-home neighborhoods.”
The gas situation has effectively stalled the sales market. From June through October 2015, 46.4 homes sold per month at Porter Ranch, according to MLS data. In November, 27 homes sold, and another 29 sold in December. In January of this year, that number fell to 12 homes sold. Months of inventory jumped from 1.6 in September to 5.3 in January.
When homes in the area have sold, prices have fallen: The average selling price for active listings in Porter Ranch in January was 16.4% less than in December. Homes that closed in January brought 11% less than December closings. While seasonality could also play into the price drop, it’s hard to imagine coverage of the gas leak not having an impact.
“It almost seems like homeowners know that buying or selling is not a very popular choice to make in this market, so everything has remained status quo,” says Metrostudy’s regional director for Southern California Dennis Handler.