Abogados

And to others still, they're concrete-and-steel follies that will stand as monuments, decades from now, to the out-of-control real-estate bubble of the early 21st century.

More than two dozen high-rise residential and commercial buildings are either under construction or in the planning stages around Orange County -- an unprecedented vertical eruption in a region famous for its horizontal sprawl.

And the trend may be building momentum. "You're definitely going to see more of them," says John Burns, an Irvine-based real-estate consultant.

"I'm working on some that are on the drawing board." As they've caught the public eye, the towers have become Rorschach tests for county residents. What exactly do they signify? Ask a dozen people that question and you're likely to hear a dozen different responses that ultimately say more about the secret longings, fears and fancies of the respondents than they do about the buildings.

Except for economists. Ask them what's behind the boom in multistory building in Orange County, and the economists answer in unison: It's the land prices, stupid. Ten years ago, the cost of land accounted for 25 percent of the cost of local houses, according to Al Gobar, a Placentia-based real-estate economist who has been tracking the local market for more than five decades. Today, land costs account for more than 50 percent of the price of local houses, cutting into the margins and profits of builders who don't adjust the way they do business.

"At some point, developers look at the numbers and say, 'The only way this works is if I build up,'" says Todd Sinai, a professor of real estate at the Wharton School at the University of Pennsylvania and a visiting scholar at UC Berkeley.

Nicolas Retsinas, the director of Harvard University's Joint Center for Housing Studies, provides a hypothetical case to illustrate how rising land prices push builders to go higher.

"If an acre costs $1 million," Retsinas says, "and you build four townhouses on the land, you're starting with land costs of $250,000 a unit.

If you build eight, then you're starting with land costs of $125,000 a unit. So it's basically arithmetic." And that arithmetic becomes more compelling as land prices rise as they have in Orange County, where an acre of land now goes for $3 million, according to Gobar. "One way to deal with the cost of land is density," Retsinas says.

This view of the high-rises as a phenomenon created mostly by high property prices is at odds with the view, espoused by some, that homebuying tastes have changed nationwide, especially among the childless and affluent, who now want to live in vertical cities rather than the traditional single-family homes.

Sinai says that's a bunch of high-rise hooey.

"I can't really believe that there's been a sea change in the way people want to live and that all of a sudden high-rises are cool," he says. "It's just that people need a place to live and there's a demand to live in the area, and developers, during a period of rising land prices, are going to do it in a way that minimizes your use of land." Economists and other real-estate analysts acknowledge there is some genuine demand for high-rise living, due largely to demographics. "The classic family with children is a minority by far," says Retsinas. "We're seeing more single households and empty nesters buying." Hence the sudden spate of high-rises in places as different as San Diego and Las Vegas, Spokane and Wichita. What's more, says Burns, high-rises are the living choice of the affluent across the globe. Why should Orange County, which has been quietly attracting the world's super rich for years be any different?

"Some people really love those living environments," Burns says. "So I believe there's quite a bit of pent-up demand for those towers. But just how deep that market is, I really have no idea. And neither does anybody else." Burns says he knows one thing for sure, though.

If all the towers that are proposed got built, we'd have a total oversupply," he says.

"But I don't think construction lenders are going to let that happen.

Generally, the high-rises are financed with a 50 percent construction loan from a large institution -- and they don't want to own the property. So I don't think we're going to see 20 or 30 high-rises under construction at the same time. We're going to see a couple -- maybe four or five -- at a time." Even so, a lot of savvy people believe the market is sky-high, especially in Irvine, where Jamboree Road could begin to feel like a man-made canyon if all the proposed projects get built. Plaza-Irvine on the northeast corner of Jamboree Road and Campus Drive would feature two 15-story condominium towers and the corner of Jamboree Road and Michelson would boast four -- two 18-story towers and two 14-story ones.

Among the other multistory projects currently under way or in the planning process: In Anaheim, city officials are planning high-rise condos in the so-called Platinum Triangle, an 840-acre area around Angel Stadium slated for up to 9,175 homes, restaurants and shops. High-rise towers with more than 2,000 residences are planned north of Gene Autry Way.

In Costa Mesa, Canadian builder Bosa is constructing two high-rise condos and has the option to build two more.

In Garden Grove, in an area dubbed the Brookhurst Triangle, Urban Pacific Builders has submitted plans to build 120 condominiums in two 10-story towers.

And the urge to go up is spreading to commercial builders. The Irvine Co.

wants to build two 14-story office towers, each with a penthouse, at the Irvine Spectrum -- the company's first since 1990. In Santa Ana, the 37-story office building that voters recently approved for Broadway at 10th Street would be the county's tallest building. Burns says he has fewer doubts about the commercial high-rises.

"We haven't seen much high-rise office construction over the last 15 years, so it's just a natural evolution," he says. "I'm surprised we haven't seen more, really. So we're not overbuilding that market."

Copyright © 2005, The Orange County Register, Calif.

Distributed by Knight Ridder/Tribune Business News.