Solano County - Once-quiet corridor from Vallejo to Davis sees housing boom

Not a lonesome highway
Once-quiet corridor from Vallejo to Davis sees housing boom
- Robert Hollis, Special to The Chronicle
Sunday, August 6, 2006

Despite 15 months of slowing sales across the Bay Area, Solano County finds itself in a unique position: Although its 36.2 percent decline in June compared with a year earlier is the greatest of the nine Bay Area counties, its median price rose the most.

Solano homes and condos continue to be the most affordable in the Bay Area, drawing a steady stream of buyers even as the median home price reached $482,000 in June, up 7.3 percent from June 2005, according to DataQuick Information Systems, which tracks real estate sales statewide.

Sandy Vollmer, president of Solano Association of Realtors, says median prices continue to inch up because homes in the lowest- and highest-priced segments are still selling relatively well in today's environment of higher interest rates and fewer buyers.

Solano's housing boom has been going for about two decades. Today the growth is most pronounced along the Interstate 80 corridor as it courses through the western hills and flat eastern expanses of Solano and Yolo counties. What was once a relatively carefree ride between the Bay Area and Sacramento can now be a daily slog that is often punctuated by gridlock.

For Vallejo residents Cathy and Ray Diaz, who are buying an as-yet unbuilt 2,810-square-foot home just across the Napa County line in American Canyon for about $800,000, there is also the lure of getting more for their money.

"We decided we wanted to move into a bigger home," Cathy Diaz said of the four-bedroom, 3 1/2-bath dwelling in Standard Pacific Homes' Dolcetto at Vintage Ranch development.

"A lot of people are willing to sacrifice commuting for a bigger home," she said. "These houses are being snapped up."

Commuters from Solano County's far-flung cities have to be a special breed: Vacaville is 52 stop-and-go miles from San Francisco via I-80 while Vallejo is 30.

The lure of more-house-for-the-money has in recent years turned places like Vallejo, Fairfield, Suisun City, Vacaville and Dixon into some of the fastest-growing communities in Northern California.

In the process, urban planners and road builders have had to race to keep up. Once-sleepy communities now struggle with development controversies and sprawl. Meanwhile, homes carrying prices from about $400,000 to upward of $1 million have created a linear suburbia along I-80.

Glen Martin, East Bay division president for Standard Pacific Homes of Northern California, agrees that home sales have slowed in the last year or so, but he predicts that it's only a pause. Standard Pacific, one of the region's major builders, has developments in Fairfield, Vacaville and American Canyon.

County and regional planners also predict that the growth slowdown is only a pause. Projections by the Association of Bay Area Governments show Solano's population of about 440,000 will expand by 30 percent by 2025 to around 573,000, with much of it expected to occur in the county's major cities, Vallejo, Fairfield and Vacaville.

To tens of thousands of motorists, the clustering of development means there is no way of avoiding rush-hour crunches along I-80 that can add 30 minutes or more to travel times. Conditions are forecast to get worse before they ever get better, according to a 2004 study done for the Solano County Transportation Authority.

Smaller communities are also struggling with rapid expansion. Dixon, once a somnambulant agricultural crossroads that hugs Interstate 80 near Solano County's eastern boundary, is undergoing a dramatic transformation as subdivisions and commercial centers have consumed hundreds of acres of the checkerboard fields covering the rich Sacramento Valley floor.

In the early 1980s, Dixon's population was around 6,000. Today it is three times that.

Real estate professionals say Dixon's growth reflects its proximity to Davis, just 6 miles east across Putah Creek in Yolo County, and Sacramento's still-growing job market. Davis is home to the University of California's largest Central Valley campus and a magnet for high-tech and biotech companies offering good salaries to the well-educated local workforce.

Since the tree-shaded university town long ago enacted tough growth controls, a strong market for home developments has emerged in Dixon and Woodland, to the southwest and northwest of Davis, respectively.

Sales down, prices up

One of the most vexing realities confronting real estate shoppers in Solano and Yolo counties is that as home sales have declined sharply for 15 months, prices have continued to rise modestly.

DataQuick figures show that in most of Solano's communities median prices were up in June compared with a year ago. Exceptions included two neighborhoods in Vallejo and Fairfield, which recorded 1.2 percent and 2.3 percent drops; parts of Vacaville, which saw a 6.3 percent decline; and Benicia, with a 5.4 percent slippage.

In some cities, declines in sales have been dramatic. In parts of Vallejo, sales were off 59.7 percent in June compared with the same month a year ago. In one Vacaville ZIP code, sales were off 48.2 percent; even Dixon saw a drop of 41.3 percent in June sales compared with a year ago.

Vollmer, the Solano Association of Realtors president, said the California Association of Realtors now predicts that the statewide median home price is likely to increase by only 8 percent for the year.

The softening market has also caused sellers to offer a variety of enticements to make a sale. "Sellers may give buyers a credit for closing costs, credits for dated household equipment," she said. "They are also leaving appliances, spas, things of that nature."

Despite increasing inducements, the average days on market for existing homes before they sell has nearly tripled in the past 12 months, according to Multiple Listing Service figures. In June, the average home sold in 74 days in northern Solano County compared with 27 days in June 2005. In the southern part of the county -- Vallejo and Benicia -- it took 72 days to sell a home on average in June, compared with 30 days in June 2005.

The Diaz family, like many other Solano homeowners, bought their first home in Vallejo more than a decade ago, moving from a rental in Daly City. With one daughter leaving for college this fall and a second girl in middle school, both parents commute long distances: Ray Diaz to Concord and Cathy Diaz via ferry to downtown San Francisco.

Cathy Diaz said what attracted her and her husband to the Standard Pacific home in American Canyon was a design incorporating an interior courtyard. "It's amazing, I've always liked homes with courtyards," she said. "We were really pleasantly shocked by the layout."

Not everyone commutes

While Solano's population growth still outstrips job growth, county officials boast of an expanding biotechnology hub in Vacaville, and new health care facilities there and in Vallejo as signs that an ever-larger percentage of well-educated residents are finding good-paying professional positions locally.

Genentech, the South San Francisco biotech behemoth, has a 33-acre pharmaceutical production facility on the outskirts of Vacaville employing about 700 people, according to the company's Web site.

The company is expanding the 427,000-square-foot facility by 380,000 square feet and expects to begin operating in the facility with 595 new employees in 2009. The expansion represents a $600 million investment, the company says.

Two other major biotech companies, Chiron, which was acquired by Novartis in April, and Alza, a unit of Johnson & Johnson, employ several thousand workers. Alza occupies six buildings while Chiron owns more than 50 acres in the city, according to Michael Ammann, president of the Solano County Economic Development Corp.

Kaiser Permanente is also making major investments in Vacaville and Vallejo to keep up with regional growth. The nation's largest health maintenance organization expects to finish replacing a 248-bed hospital adjacent to its medical office complex in Vallejo in 2008. A 166-bed hospital in Vacaville, next to I-80 at Leisure Town Road, is also under construction and will be finished a year later, Kaiser says.

By far the largest employer in the county is Fairfield's Travis Air Force Base, whose 19,000 or so military and civilian personnel pump about $1 billion a year into Solano's economy, according to Karin MacMillan, the city's former mayor who ran unsuccessfully in June for county supervisor.

Fairfield voters in 2002 enacted a controversial urban growth boundary that banned housing and commercial development around the sprawling airbase. MacMillan said 60 percent of voters approved the measure to help protect "this incredible economic engine" from possible closure by the Pentagon. The growth limit explicitly allows the airbase to expand into the protected open space for military purposes, she said.

Another large employer in Vacaville is the state Department of Corrections, which operates the California Medical Facility and the Solano state prison.

Working locally can make a big economic difference, especially in an age of $3.25-a-gallon gas. Before she landed her job as the Napa-Solano field representative for the Greenbelt Alliance in her hometown of Fairfield, Nicole Arnold worked for a nonprofit in Sacramento.

"Even though I drive a fairly small car, I figure I saved $5,000 on gas and other travel costs after the first year," she said. "That's like getting a $5,000 raise." She says she feels "incredibly lucky" to now work in Solano County.

Development galloping

Traveling east from Vacaville along I-80, subdivisions and commercial development thin out and travelers can still see stretches of agricultural land that once dominated most of the route from Vallejo to Sacramento. But this, too, is changing.

Dixon is embroiled in a divisive debate over a proposed 260-acre racetrack-satellite betting-retail/entertainment complex called Dixon Downs.

Proponents, including many local officials and the city Chamber of Commerce, argue that the project planned for the northeast corner of town by Magna Entertainment of Ontario will bring much needed tax revenues, developer-paid streets and sewers, a large number of permanent jobs and a general revitalization of the local economy.

Opponents say the sprawling project will fundamentally alter the community's small-town image, significantly worsen traffic, exacerbate air pollution and, if laws change in the future, bring slot-machine-style gambling.

Nor is the racetrack complex the only development changing the city. About 600 acres of commercial development and 500 acres of residential development have been constructed, approved or proposed within the small city, according to the draft Dixon Downs environmental impact report.

Last August, opponents presented petitions signed by about 1,700 people seeking to have the Dixon Downs proposal put to a public vote. But in May, the City Council declined to put the issue on the ballot. Now the council is looking at other ways to gauge citizen sentiment.
Next week: Transportation and the environment on the Interstate 80 corridor.