3 Beach Cities’ Residents Saw Hefty Pay Gains During the ‘80s : Income: Hermosa, Redondo and Manhattan are among the county’s leaders in financial growth. But defense cuts could change that.

The incomes of residents of the South Bay’s three beach cities jumped significantly during the 1980s, newly released Census Bureau data shows, placing those cities among the top five for income growth in Los Angeles County.

Experts speculate that a boom in aerospace employment during that time, sharp increases in home prices and the conversion of rental units into condominiums combined to attract wealthier residents to the South Bay, while forcing lower-income families to move away from the coast.

Hermosa Beach, which experienced a 45% growth in its median household income between 1979 and 1989, ranked behind only two other Los Angeles County cities--Bradbury, which saw a 64% jump, and Hidden Hills, which edged Hermosa with a 45.1% rise.

The median household income for Hermosa was $54,497 in 1989. Redondo Beach’s 41.9% increase to $51,913, ranked that city fourth in the county. Manhattan Beach, with a 37.4% income hike to $67,723, came in fifth.

In the South Bay, El Segundo saw the next highest increase with 25.2% to $46,352, followed by Palos Verdes Estates at 24% to $101,320 and Lomita with 20.3% to $36,222. Household income in the county as a whole grew 18.8%, to $34,965.

“We have a nice climate and a great beach and we can’t expand anywhere, so more and more people want to move here and that makes land prices just go up and up,” Hermosa Beach Mayor Robert Essertier said.

In his neighborhood alone, Essertier said, several small, old houses have been torn down to make way for larger, modern structures.

“Every house on my block has more than doubled in value, and the incomes of the people who have moved in are at least twice as much as the people who lived there before,” he said.

Essertier said he believes that many of the people arriving in the South Bay are former Orange County residents tired of long commutes to their jobs in Los Angeles.

“I guess you could call it deterioration of the transportation system,” he said. “They used to spend 45 minutes getting here from Orange County and now it takes an hour and a half, and they just don’t want to do it anymore.”

Demographics and economics experts say Essertier is probably correct.

“You’ve got a whole basket of amenities which are desirable in the beach areas--air quality, school quality, access to the beach and its ‘sun and fun’ amenities,” said Stuart A. Gabriel, an associate professor of finance and business economics at USC. “Those amenities get priced into property values, and obviously only those who can afford to pay for them will be located in those areas.”

Gabriel said the South Bay has been moving in the last decade away from its traditional manufacturing and petrochemical industry base toward the white-collar corporate professions that bring in a highly educated, highly paid population.

Many Japanese companies--including Honda, Nissan and Toyota--have located their North American corporate headquarters in the South Bay. New office buildings have sprung up in El Segundo and Torrance to attract a greater variety of professions.

But demographers warn that the recession may have sharply changed the South Bay’s income outlook since the Census Bureau collected its figures.

“You have to remember that the 1990 Census was prior to the cuts in defense, so what we may be seeing is history . . . a photograph of a certain moment in time,” USC Assistant Prof. Pini Herman said. “A lot of the people counted as happy, healthy and fat then may be seeing leaner times now.”

But other experts say the South Bay’s affluent areas may not be as sharply impacted by aerospace cuts as some might suspect.

“There’s no question that the aerospace decline will have an impact on the South Bay, but the whole character of those communities has changed over the last decade,” said USC’s real estate program director David Dale-Johnson, a resident of Manhattan Beach. “The typical household in a place like Manhattan Beach now is a lawyer/MBA combination, I’ll bet, and most of those people don’t work in the aerospace industry.”

Many aerospace workers, Dale-Johnson said, have long been priced out of the coastal South Bay market.

“Those companies have pretty active van pools bringing people in from places like Diamond Bar and Riverside,” he said.

HOUSEHOLD INCOMES BY CITY: B6

Household Income by City

Following is a list of South Bay cities showing median household income in 1989 and the percentage of change in those earnings since 1979. The state as a whole had a 17.1% increase. Income figures for 1979 were adjusted for inflation before increases were computed:

City ’89 Median Household Income Rise Since ’79 Avalon $27,610 13.7% Carson $43,882 10.0% El Segundo $46,352 25.2% Gardena $33,063 6.8% Hawthorne $30,967 6.7% Hermosa Beach $54,497 45.0% Inglewood $29,881 18.7% Lawndale $34,552 18.7% Lomita $36,222 20.3% Manhattan Beach $67,723 37.4% Palos Verdes Estates $101,320 24.0% Rancho Palos Verdes $79,797 13.4% Redondo Beach $51,913 41.9% Rolling Hills $150,001* 19.3% Rolling Hills Estates $86,304 9.7% Torrance $47,204 16.6%

Source: U.S. Census Bureau

* Actual median income may be higher. Census categories stopped at “$150,000 and above.”