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More than 9,000 structures have been damaged or destroyed by an unprecedented wildfire that has been burning in Los Angeles for four days. As a result of the fire, 10 people died.
The damage appears to be almost apocalyptic, according to those working directly on the damage, such as Josh Altman of the Altman Brothers. No matter what you think of it, it’s beyond that. ”
Destroying entire neighborhoods like Pacific Palisades would put stress on the city’s already existing housing shortage. For now, displaced people are taking shelter in public shelters, the homes of friends and family, and hotels, but soon these individuals and families will have to find short-term, long-term, and ultimately permanent solutions. You’ll need to find a solution. The question of where to live, whether to rebuild or start anew somewhere else.
The Los Angeles metropolitan area already has a housing shortage of about 337,000 units, according to Zillow data obtained by The New York Times. As of December, the number of active listings was 26 percent below pre-pandemic levels.
“One of our biggest challenges going forward will be providing permanent, long-term housing for people who have lost their homes,” Pasadena Mayor Victor M. Goad said Wednesday. Pasadena was severely affected by the Eaton Fire, with hundreds of buildings damaged or destroyed.
In the short term, Los Angeles’ constrained rental market is likely to tighten even further, as many displaced residents may wait for the right time to rent while deciding on their next move. In an email to Inman, Dr. Thelma Hepp, Chief Economist at CoreLogic, predicted that rents would “soar” as evacuated people seek shelter, and that this would occur in areas affected by natural disasters. This is a typical effect.
Local real estate agents are also scrambling to find new housing for those affected.
“When we say we have thousands of rental inquiries right now, we actually have thousands of inquiries,” James Harris of Bond Street Partners told Inman.
“The reality is, what’s so refreshing right now is that people are literally starting to think about where they’re going to live for the next 90 days, let alone the next 12 months, three years, five years. So the number one focus right now is , where are they going to live? And step two is, what are we going to do long term? I think it will be.”
Firefighters battle the Palisades Fire, January 8, 2025 | Official CAL FIRE on Wikimedia Commons
The surge in rental demand may already be starting to be reflected in rent prices, according to data obtained Thursday morning by Paul Salazar of Hilton & Hyland’s Salazar Group. That morning, Salazar told Inman that 71 price increases were recorded across all property types in the past 24 hours. Of the 71 price increases, 66 were for rental properties.
“We don’t know if these are people trying to take advantage of this situation to get a higher price,” Salazar noted. “I think some of them are doing that, but I also think some of them are offering short-term rentals. So, naturally, when you offer short-term options, the prices go up. .”
He has also seen some home sellers remove properties for sale in areas adjacent to areas hardest hit by the wildfires and relist them as rentals. This is because while demand is strong, they can earn high rents and sell later. line.
The evacuation of so many people will also impact those not directly affected by the fires, as more people compete for housing in fewer areas. For example, Dr. Jonathan Zasloff, professor of land use and urban policy at the UCLA School of Law, who lost his home in the Pacific Palisades, is likely to look for a rental property closer to the university in the short term, giving him one more rental option. It turns out. He told The New York Times that he has heard from students and other renters looking for housing in the area.
Affordable housing has been a major issue in California over the past decade, with lawmakers passing a series of new laws at the state and local level to increase affordable housing and make development easier. An executive order signed by Los Angeles Mayor Karen Bass streamlines permitting for projects where all units are affordable.
Additionally, over the past decade, California and the City of Los Angeles, among others, have continued to pass laws that make it legal and easier for individuals to construct accessory dwelling units (ADUs) on their property.
However, despite these reforms, the city of Los Angeles and the state of California have not met their housing production goals. The number of apartment units approved by the city of Los Angeles will drop to its lowest level in 10 years in 2024, according to data from the Los Angeles Department of Building Safety compiled by news site Crosstown LA.
Rebuilding in fire-affected areas also presents its own challenges, with a surge in demand for new construction raising costs, increasing pressure on overall housing production and potentially delaying the time it takes to actually build. On top of that, LA also faces a long-term construction labor shortage.
It is still too early to tell how much catastrophic fires will contribute to the current housing shortage, as it is unclear how many people will decide to stay in areas that are increasingly prone to extreme weather. be.
“that [is] It’s like the coronavirus,” Harris told Inman. “There were a lot of things we didn’t know. It was, ‘Will I ever live in an apartment again?’ It happens to everyone now, but back then I never thought it would happen.
“So I think it’s too early to know at this point. But what’s clear to us is that of course there’s a housing shortage. Of course we have to think about where to put all these people.” But until you understand, do these people want to rebuild their existing premises? Are they selling their land? [finished] house? Are insurance companies paying the amount they are supposed to? Do people really understand what their insurance covers? Are people insured?
“There are so many questions that are unknown at this point and won’t be answered for at least a few months. That’s the reality of it all.”
Email Lillian Dickerson
