The wildfires ravaging Los Angeles are expected to intensify the region’s housing affordability dilemma both now and in the future, according to housing experts and advocates.
Rental prices are anticipated to increase, particularly near the heart of the extensive fires in Pacific Palisades and Altadena. Individuals intending to reconstruct their residences will encounter fierce competition for contractors. Additionally, the repercussions on the fragile home insurance sector could result in heightened expenses for all residents of Los Angeles.
“It’s going to occur rapidly,” stated Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate, regarding the effect of mass evacuations on escalating housing expenses. “It’s challenging to quantify. I don’t believe anyone has a clear idea of what that figure is.”
Despite the devastation representing a minor fraction of Los Angeles County’s 3.7 million homes, the influence on available inventory is considerable and is expected to deteriorate further as fires persist with minimal or no containment. As of Thursday afternoon, fire authorities estimated that the Palisades and Eaton fires had obliterated over 9,000 single-family residences, multi-family dwellings, businesses, and other edifices. In contrast, during 2023, the most recent complete year of U.S. Census data accessible, 24,300 residential units, encompassing apartments and condominiums, were granted building permits in Los Angeles County.
Larry Gross, executive director of the tenants’ rights organization Economic Survival Coalition, expressed concern that thousands of relatively affluent evacuees are being forced into the region’s strained rental market.
He mentioned that some landlords may seek to exploit the situation by increasing rents and evicting tenants in favor of displaced homeowners who can afford higher payments. Although the state’s price gouging regulations are intended to prevent such occurrences, Gross indicated that additional measures need to be implemented to guarantee enforcement.
“We must think innovatively,” he states. “Both state and city authorities must act to ensure this crisis is not exacerbated by profiteers.”
Experts noted that the fires will introduce numerous pressures to Los Angeles’ housing challenges, many of which are already at risk of aggravation. More than 65,000 property owners in Los Angeles have not renewed their insurance policies within the past five years, and state officials were hoping that updated regulatory changes would attract insurance companies back to high-risk zones. Confronted with massive losses from the fires, with preliminary damage estimates surpassing $50 billion, businesses are withdrawing to assist not only homeowners and landlords in reconstruction efforts but also others throughout the region, or raise premiums, as stated by Richard Green, director of the USC Rusk Real Estate Center.
“No one can predict what the insurance companies will decide in the wake of this,” Green remarked.
Reconstructing housing will encounter further obstacles, contested by a limited pool of contractors and a diminishing construction workforce, a crucial element sustaining the low rate of housing output in Los Angeles prior to the fires. That is a contributing factor, he indicated.
“There is already insufficient supply,” Green commented. “That was one of our issues.”
Gabriel asserted that to facilitate residents moving into new housing, Los Angeles must transform its protracted permitting process for development, which should have been an urgent priority even before the fires occurred.
In 2023, he co-authored a report revealing that the average multifamily unit takes nearly five years to finalize, with a considerable portion of that timeframe tied to bureaucratic approvals.
“These homeowners and the city cannot afford to wait five years to restore these homes,” Gabriel stated.
He urged Mayor Karen Bass and the City Council to establish a streamlined approval procedure for homeowners impacted by wildfires and utilize that as a benchmark for overhauling the entire system.
The catastrophic fires have complicated the resolution of the city’s housing dilemma, yet it remains a vital issue, Gabriel remarked.
“Addressing the availability of affordable housing is essential if the City of Los Angeles aims to stay competitive with numerous other metropolitan regions both nationally and internationally,” he stated. “If the city falters in this aspect, it will provide households and businesses with yet another reason to seek alternatives.”
Times staff writer Andrew Khoury contributed to this report.