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More than 9,000 buildings have been damaged or destroyed amid the unprecedented wildfires that have been raging in Los Angeles for the past four days. Ten people died as a result of this fire.
The damage looks almost apocalyptic, according to those who experienced it firsthand, such as Josh Altman of the Altman Brothers, who said, “It’s worse than you thought. Whatever you think – it’s more than that.”
The destruction of entire neighborhoods like Pacific Palisades will put pressure on the city’s already existing housing shortage. For now, those displaced have moved into public shelters, the homes of friends or family, or hotels, but soon, those individuals and families will need to find short-term, long-term and, ultimately, permanent solutions. the question of where they can live, whether they decide to rebuild or start over somewhere else.
The LA metro area already has about 337,000 homes, according to data obtained by Zillow. The New York Times. As of December, the number of active listings was 26 percent below prepandemic levels.
“One of the biggest challenges will be getting people who lost their homes into long-term housing,” Pasadena Mayor Victor M. Gordo said Wednesday. Pasadena was severely affected by the Eaton fire, with hundreds of buildings damaged or destroyed.
In the short term, LA’s troubled rental market will likely tighten even more, as many displaced residents can use their rental period while deciding on their next move. CoreLogic Chief Economist Dr. Selma Hepp said in an email to Inman that she expects rents to “go up” as those displaced seek shelter, a common outcome in areas experiencing natural disasters.
Local real estate agents also insisted on finding new homes for those affected.
“When I tell you there are thousands of inquiries going on right now for leases, there are thousands and thousands of inquiries,” James Harris of Bond Street Partners told Inman.
“The reality of this is that it’s still so new right now that people know where they’re going to be for the next 90 days, let alone the next 12 months, three years, five years. So I think the main focus now is, Where will I put my family? Where will they live? How do I put a roof over their head? And I think the second step will be more, What will I do for a long time?“
Firefighters battle the Palisades Fire on Jan. 8, 2025 | CAL FIRE Official on Wikimedia Commons
Increased rental demand may be starting to show in rents, according to data released Thursday morning by Paul Salazar of the Salazar Group at Hilton & Hyland. On that day, there were 71 price increases across all types of real estate in the last 24 hours, Salazar told Inman. Of those 71 sales, 66 of them were in rental properties.
“I don’t know if people are trying to take advantage of this situation and get a higher price,” Salazar said. “I’m sure some of them are there – but I’m sure some of them are short-term rentals. So naturally, if you offer a short-term option, the price goes up. “
He’s also seen some real estate agents take their listings in neighborhoods hit hard by the wildfires on the market, re-list them as rentals, since they can get higher rents now while demand is strong, and sell later. line.
The displacement of so many people will also affect those not directly affected by the fires, as more people compete for housing in fewer areas. For example, Dr. Jonathan Zasloff, a professor of land use and urban policy at UCLA Law School who lost his home in Pacific Palisades, will likely look for a temporary rental near the university, which will eliminate another rental option. to students and other tenants looking for housing in the area, he said The NYT.
Affordable housing has been a major challenge in California over the past decade, with lawmakers passing a series of new laws at the state and local levels to promote affordable units and make it easier to develop them. An executive order signed by LA Mayor Karen Bass makes it easier by allowing projects where all units are affordable.
Additionally, over the past 10 years, California and LA, in particular, have continued to pass laws that make it legal and easier for individuals to build affordable housing units (ADUs) in their buildings.
Even with these changes, however, the city of LA and the state of California are lagging behind their housing production goals. The number of apartments approved by the city of LA is set to hit a 10-year low by 2024, according to data from the Los Angeles Department of Building and Safety compiled by news website Crosstown LA.
Rebuilding in areas affected by the fires will also present its own challenges, as increased demand for new construction leads to higher costs and increased pressure on overall housing production, which may delay construction timelines. In addition, LA has also experienced a chronic construction worker shortage.
It is too early to say how much of an impact the catastrophic fires will have on the existing housing shortage as it is unclear how many people will decide to live in a climate-prone area.
“It [is] like COVID,” Harris told Inman. “There’s a lot we didn’t know. It was like, Would I live in an apartment building again? Well, everyone today, but at that time, they didn’t think they could do it.
“So I think right now, it’s too early to know. But what is clear to us is that, of course, there is a shortage of houses. Of course, we’ll have to figure out where to put all these people, but until we figure it out, Do these people want to rebuild their existing properties? Are they looking to sell their property and buy a [finished] the house? Are insurance companies paying what they should? Do people really understand what their insurance covers? Do people have insurance?
“There are many unknown questions right now that we won’t have answers to for at least a few months. That is the truth of it all.”
Email Lillian Dickerson
